Oil higher, gold above $1,800, bitcoin slides

Oil rally lacking momentum, again

Oil prices are on the rise again at the end of the week, with Brent and WTI adding around 1% on Friday. This comes a day after they pulled back off their highs as profit-taking appeared to kick in around $86 and $84, respectively. It’s still early days but this rally appears to be suffering the same problems as the last couple, a lack of momentum.

That doesn’t really change the medium-term outlook for oil prices, which remains fundamentally bullish, but perhaps we will see a slightly larger pullback over the next week or so.  If we do, key support for Brent lies around $80-81, if $83.50 falls. Should momentum pick up with any rallies, we could see $90 oil soon enough.

Gold holding above $1,800

Gold prices have rallied above $1,800 and appear to be holding firm after as we’ve moved into the US session. The US PMIs appear to have boosted sentiment early on which has weighed on the dollar and given gold a kick through that big resistance level. If it can hold onto the $1,800 handle at the end of the week, it would be a bullish signal.

If that coincides with the dollar index breaking below 93.50 which could see the pressure build back towards 93 early next week, it would be even more bullish for the yellow metal which seems to be benefiting from central bank tightening ambitions outside of the US. The next big test for gold is $1,833, a level that’s had the better of it on a number of occasions the last few months.

Buy the rumour, eventually sell the fact

We may well be seeing the fact being sold after all, with bitcoin prices falling 5% on Thursday and adding to those losses today. The launch of the ETF generated plenty of excitement in the space in the hope that it could lead to another hype surge as institutional money pours in.

It appeared that it was holding onto those gains shortly after the launch but perhaps we’re seeing some profits being locked in which may weigh on cryptos in the near term, especially if $60,000 falls. The launch of the CME futures triggered a “sell the fact” reaction four years ago and we’re probably seeing that again. Of course, that turned into a far more serious price crash, something that will probably be avoided this time around. Although when it comes to bitcoin, you never know.

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
Craig Erlam

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