Oil and gold rise, bitcoin consolidates

Oil rises on hopes of further stimulus

Crude prices rose as dollar weakness resumed on fresh prospects of additional stimulus.  Thin trading conditions should make oil prices consolidate near the upper boundaries.  If the headlines on the virus front start to deteriorate in Asia, that could be the excuse for traders to hit the sell button.  South Korea’s daily death toll rose to a record and Thailand warned stricter measures could be coming.

The next big move for crude will likely stem from the January 4th OPEC+ meeting that should pave the way for another gradual increase in production.  Russia is jockeying for a 500,000 bpd increase in February, but that might be difficult if the lockdown situation worsens globally.

Gold poised to consolidate 

Gold prices are trying to hold onto gains as the dollar softens.  It is all about stimulus for gold and right now the uncertainty remains as to when will we see more.  President Trump’s push to increase stimulus checks to USD2,000 may die at the Senate, but it has helped the Biden administration find out which lawmakers are willing to work with him.  The prospects of more stimulus seem likely, investors will just have to wait until Biden takes office.  Gold prices appear poised to consolidate this week as the shortened trading week will be accompanied with thin liquidity.

Bitcoin volatility continues

Bitcoin appears to be consolidating ahead of another run towards a massive psychological level.  Bitcoin momentum was relentless on the break of the USD20,000 level and that could happen again with the USD30,000 level.  Volatility will remain elevated during the week as thin trading conditions in the past have delivered some of the larger moves.

In past years, after a strong fourth quarter, Bitcoin has often delivered a massive pullback.  That will be tested over the next couple of weeks.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. 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. Prior to OANDA 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, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.