Oil rebounds, gold up as dollar dips

WTI back above USD60

Oil saw some profit-taking late last week but it’s rallying strongly once again on Monday. Brent is up more than 2% while WTI is around 3% higher and back above USD60. The global recovery trade is very favourable for crude, as long as OPEC+ don’t rush to turn the taps on.

Upcoming meetings are going to be challenging for the group as producers battle the temptation to ramp up production in the face of a brighter outlook but not flood the market once more. US shale is also a major factor in the process, with Russia in particular wary of reopening the door to them.

The rally doesn’t quite have the momentum it did though which will make these rallies all the more interesting.

Gold jumps as dollar pulls back for third day

The greenback is suffering a little once again on Monday, extending its losing streak to three days and the dollar index is coming very close to key support that could make the near-term outlook appear very different. It had been on a good run and key technical levels were being overcome but the recovery appears to have stalled before it’s got going.

This would naturally be good news for gold, but with US yields rising and still doing so at a decent pace – despite pulling back today – the dollar should remain in favour at the expense of the yellow metal. Of course, if Powell is very successful in playing down the risks of tapering over the next couple of days, that could change.

Musk delivering two way market for bitcoin

Elon Musk is providing a two-way market for bitcoin all on his own these days. The Tesla CEO suggested prices do seem high which appears to have been taken by some to be a “take some profit” signal. Musk has seen his influence grow in the crypto space and the investment by Tesla has only increased that in recent weeks. Speculators are clearly hanging on his every word. It seems to be doing alright though, back to USD53,000 already as USD50,000 became dip-buying territory. This kind of euphoria should probably make people nervous but I doubt it will. I’m sure new highs are just around the corner.

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