Oil a touch firmer ahead of EIA report, gold little changed, Bitcoin softens

Oil stable ahead of EIA inventory report

Crude prices are stabilizing ahead of the EIA crude oil inventory report that is expected to show stockpiles declined by 2.9 million barrels. Yesterday’s API report showed inventories rose by 2.7 million barrels.

Oil has had a rough week as concerns grow that short-term crude demand outlook might be much weaker as the winter wave of the virus intensifies and new strain risks are triggering wider lockdowns.

If US lawmakers are able to quickly resolve President Trump’s last-minute demands over stimulus, crude prices could catch a bid. Trump caught the markets and Congress off-guard by threatening to use a veto to reject the stimulus bill which Republicans and Democrats have hammered out after a long standoff.

Gold remains in choppy waters

Gold prices are little changed awaiting the Republican response to President Trump’s last-minute demand to boost direct payments to Americans.  Gold initially sold off after Trump’s move sent shockwaves and sparked fear that Congress might not be able to deliver any stimulus.  Wall Street is still expecting a coronavirus relief bill to pass before December 28th.

Gold could have a choppy rest of the year, but if Republicans capitulate and the price tag of stimulus grows, Gold could break above the USD1900 level.

Bitcoin consolidates ahead of Christmas

Bitcoin is consolidating ahead of the shortened trading week.  Broad crypto weakness is emerging early in North America as profit-taking occurs ahead of the Christmas period.

An influx of new investors has provided many reasons to be short-term bullish, the largest cryptocurrency.  Money managers who have underperformed are likely going to jump into the cryptoverse and will likely want to show their investors that they are not missing out on the best performing asset of 2020.

Thin conditions will persist till year-end and that should easily allow Bitcoin volatility to test the USD20,000 or USD25,000 levels.

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.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya