Oil fades, gold and bitcoin move higher

January 29, 2021 Share Print 0

Oil rally fades again

Oil’s rally faded once again on Thursday and while crude is slightly higher today, it’s now facing strong resistance above. This is a market that has been on an incredible run since early November and now finds itself at very health levels. It’s lost significant momentum over the last few weeks and even a massive inventory draw this week has failed to change that. We could see a minor correction from here, or further consolidation as we’ve seen recently, but the market remains well supported by the actions of OPEC+, even in this challenging economic environment.

Reddit getting to grips with precious metals

Precious metals could be seeing some spillover from the Reddit community in the latest unexpected twist. Silver prices soared on Thursday and it’s up around 3% again today. Gold isn’t seeing quite the same moves but may be benefiting a little by association, with the yellow metal seeing gains of more than 1%, despite higher yields and a firmer dollar. It will certainly be an interesting one to watch and the situation unfold, with a move above USD1,875 potentially triggering a run at USD1,900. Volatility is only likely to pick up from here.

Musk sends bitcoin to the moon

It wouldn’t truly be a wild week without bitcoin getting in on the action. Elon Musk has suddenly become the most influential person on Twitter, taking the mantle from Donald Trump after his profile was deleted. All Musk has to do is mention something and traders go wild for it. Like, for example, put #bitcoin in his twitter profile, sending the cryptocurrency soaring, up 30% from its lows on Wednesday. Given everything we’ve seen this week, this is increasingly looking like normal behaviour. One thing is certain though, an apparent vote of confidence from the world’s richest man doesn’t half carry some weight and ends any chance of price breaking below USD30,000, something that was looking increasingly likely. Even Binance suspending withdrawals did nothing to shake it. Whether Musk is an investor or just having a little fun doesn’t even matter at this point. The markets are turning into his newest toy. Time to turn on Twitter alerts.

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.

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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.