Oil stays above USD50, gold slips

Oil rally faces near-term risks

Oil prices are edging higher after pulling back a little at the end of last week. They remain near their highs though, with Brent holding above USD50 a barrel. I do wonder whether it is running out of steam though and given the near-term downside risks as Germany goes into a more severe lockdown and the US sees record cases and fatalities, with the trajectory still in the wrong direction going into the holiday period, that could create some downside pressure in the coming weeks. With OPEC+ remaining flexible though, downside risks may be more limited than we would otherwise see.

 

Gold paring gains ahead of the Fed

Gold is struggling again today and broken back below USD1,830 this morning where it had been seeing some support over the last week or so. We could see more downside over the next couple of days, at which point we may have a better idea of what Congress and the Fed have in store, both of which could be very bullish factors for the yellow metal. The key support for me is USD1,800 ahead of the meeting on Wednesday. After that, it will depend on just how aggressive the Fed will be.

 

Matter of when rather than if for bitcoin?

Bitcoin is pushing higher after once again finding solid support around USD17,600 in recent days. The crypto is already seeing some profit-taking on approach to the highs, just below the psychologically significant USD20,000 level. This has been a massive barrier over the last month but I remain confident that it’s a case of when rather than if. Trading over the last week or so has only made me more confident that a break is coming and once it does, it could really gather speed given the hype that would come with it.

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 BNN. 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