Oil pushes past USD50, gold eases

Brent holding above USD50

Brent crude broke above USD50 for the first time since March on Thursday and is just about holding on in early trade today. At the time of writing, it’s strongly testing this level from above but holding. A weekly close above here could be a very encouraging technical signal for the markets after an incredible run over the last six weeks.

The near-term outlook for the global economy is far from rosy but OPEC+ addressed this last week in paring back planned production increases from January and instead tapering far more gradually over the opening months of the year. It’s never that straightforward and they’re far from out of the woods but a hold above USD50 would be very encouraging.

 

Gold easing into the Fed and stimulus talks

Gold is coming under a little pressure again this morning, adding to losses over the last couple of days as traders lock in a little profit ahead of a big week for the US. Stimulus talks, a Fed meeting and a vaccine rollout is some week and gold should be very sensitive to developments, particularly in relation to the first two.

With Congress acting late in the day and no deal being agreed yet, the Fed may be forced to step up and do something to keep markets onside. The economy is facing a brutal winter and more support will be welcomed. That may be enough to support gold prices but we could see them soften a little, towards USD1,800 in the run up to it.

 

Fascinating end to the year for bitcoin

Bitcoin is not having a good week, down almost 9% since Monday and below USD18,000. This comes after multiple failures to break USD20,000 and suddenly USD16,000 is looking more vulnerable than it previously did. I still believe a break into new territory above USD20,000 is more likely, but a move below USD16,000 would be a massive test of the bitcoin buzz that saw it hit new highs earlier this month. It should be a fascinating end to the year.

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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