Commodities and Cryptos: Oil rally take a break, Gold stumbles, Bitcoin momentum continues

Oil

Crude prices are taking a moment after the February breakout took prices above levels some analysts thought couldn’t be touched until a couple years down the road.  Oil prices were unfazed from both monthly reports from the IEA and OPEC.  Both acknowledge the hit to demand in the first quarter and point to an upbeat second half of the year.

The key for whether the crude rally continues is if we don’t see a spike in cases as restrictive measures are eased.  With most of Asia celebrating the Lunar New Year holiday, price action on crude could become rather choppy and warrant some profit-taking. 

Gold

Gold prices are struggling today as lawmakers continue negotiations over President Biden’s COVID relief plan.  House Speaker Pelosi’s insistence that the stimulus bill will have a $15 minimum wage likely means negotiations will drag on further as conservative Democrats, such as Senator Manchin will likely remain hesitant to support it. 

Gold prices extended their slide on concerns the next week will be filled with West taking on China.  The EU will outline their plan on getting China to adopt fairer trade practices and this comes right after a tough first phone call between presidents of the world’s largest two economies.  Biden and Xi’s call covered trade, aggressive policies abroad, and human rights abuses. 

Part of the stimulus trade for gold is how quickly after this COVID relief bill, how soon will we get to see some infrastructure spending.

Bitcoin

Bitcoin hit a fresh record high after announcements from both MasterCard and BNY Mellon confirmed the fundamental shift that financial institutions are committing to cryptocurrencies.  The news has been mostly positive for the cryptoverse and steady demand with a tight supply should support higher prices.  Improved mainstream acceptance for cryptocurrencies are completely easing most regulatory concerns for now.  Bitcoin is on a tear and it could get very interesting to see how momentum traders react to a break of the $50,000 level.  The $50,000 level was the ultimate target for many, so it will be interesting to see how much profit-taking occurs. 

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