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Commodities and Cryptos: Suez Canal Disruption continues, Gold steady, Bitcoin rallies

Oil

Crude prices are rising after reports that the Empire State Building-length Ever Given container vessel blocking the Suez Canal will remain stuck until at least next Wednesday.  Shipping rates have risen for a third consecutive day since the crucial east-west trading route that handles over 12% or world trade was only expected to take a couple days to get dislodged.  Supply lines for crude are stretched thin so if this blockage lasts the greater Wednesday, oil prices should strengthen. 

Egypt’s Suez Canal Authority reported that dredging operations at the bow of the ship are about 87% complete.  The current dredging proximity is at 15 meters, with 10 meters eyed as the safest dredging proximity. 

Oil has been punished this week as COVID cases spiked higher globally and over the slow rate of vaccination in Europe.  WTI crude is down over 11% since the March high but should have massive support from the mid-$50s. 

Crude prices extended gains after Goldman Sachs noted they expect a slower ramp-up in OPEC+ production.

Gold

Gold prices are looking vulnerable as Treasury yields continue to push higher.  Gold’s two-week rally will end as investors struggle to assess the momentum in global economic recovery and the anticipation of inflation.

Rising COVID cases across the globe, including the US should provide some support to the argument that all the major central banks will remain ultra-accommodative in the short-term.   The surge in Treasury yields is moderating and a steady climb higher should still be an environment that could have gold appreciate. 

Bitcoin

Bitcoin bulls are defending the $50,000 level as traders brace for the record $6 billion contract expiration Friday.  Social media platforms (Twitter and TikTok) have focused on today’s expiry as a temporary hurdle for Bitcoin, but should do little to derail the long-term view for many hodlers (hold on for dear life). 

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 [4]

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
Ed Moya

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