Commodities and Cryptos: Oil follows weaker dollar move, Gold rallies, Bitcoin higher

Oil

Crude prices are closely following the move in the dollar as energy traders can’t get a handle of what crude supply to expect in August.  The short-term supply side uncertainty suggests we could see a shortfall in the coming weeks, but that it could threaten the stability that has come from the coordinated efforts made by OPEC+.  Thursday’s low for WTI crude also coincides with the low made with the 10-year Treasury yield, suggesting the majority of the rally has nothing to do with traditional supply or demand drivers.  

Gold

Gold got a boost after the PBOC followed through and cut the RRR rate to boost lending in the economy.  The world’s second largest economy is concerned about growth, which suggests they are pivoting away from tightening.  Next week’s Chinese second quarter GDP might have a sharper slowdown than expected and that might be why the PBOC is trying to get ahead of the news. 

Gold is tentatively stabilizing above the psychological $1,800 level and that could open the door for a stronger rebound next week.  Next week is a busy week that is filled with many risk events that could very well support the argument for bolstering up safe-haven protection.  Investors will closely await Tuesday’s inflation report and kickoff to earnings season.  If Treasury yields can remain mostly heavy next week, that should be enough to help gold recover half of its losses made in June.  Technical bullion buying could accelerate with a daily close above the $1,830 level.   

Bitcoin

Cryptos are rebounding given the broad-based risk rally that stemmed from China’s RRR cut.  Dogecoin is higher after Elon Musk tweeted another case for supporting how it could optimize transactions.  Dogecoin is expected to have an update soon and that could be the make or break moment for it. 

Bitcoin was unfazed by Guggenheim Investments Chairman Scott Minerd’s downbeat comments.  Minerd believes Bitcoin is in the midst of a crash and could fall to the $10,000 level.  Minerd is a Bitcoin bear and a few weeks ago called for Bitcoin to see more declines with the $20,000 level being the next key support level.  Bitcoin has strong support at the $30,000 level and it looks like that should still hold given the fresh wave of accommodation that will stem from this recent wave of global growth concerns.  

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