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Oil loses OPEC+ gains, Gold rally falters, Cryptos rally on banking woes

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  • Oil tumbles on recessionary fears
  • Gold struggles as yields push higher
  • Bitcoin recaptures $29,000

Oil

Crude prices just saw all of its gains from the OPEC+ surprise production cut erased as macro backdrop has become a disaster. Oil has been in freefall over a challenging economic environment, banking jitters, disappointment with China’s reopening, fears of overtightening by the Fed, and on expectation Permian basin production has yet to peak.

WTI crude pared losses after a bullish EIA report showed gasoline demand roared back. The economy is weakening but it isn’t falling off a cliff, so we shouldn’t be seeing oil trade near the low $70s. ​

China’s recovery is not materializing, and US demand is weaker, so $100 oil won’t be happening. ​

Oil

Gold

Gold prices initially rallied as banking worries return to the front burner and as Fed rate hike odds continue to evaporate. ​ It looks like gold’s best friend is a little bit of financial stress as that has helped swaps no longer fully price in a rate hike by mid-year. ​ Gold got its groove back and unless First Republic is miraculous saved and we don’t see any immediate stress on other midsized banks, the precious metal could make a run towards record highs. ​

Gold turned negative as yields turned positive as investors realized the banking crisis was likely contained and the focus will shift back to inflation. ​

Bitcoin

Banking jitters have revitalized life back into cryptos. ​ Bitcoin is surging and so are all the major cryptos as banking stress supports the use case for digital assets. ​ Bitcoin is still facing a ton of resistance and this current rally will likely struggle until we get a clearer regulatory framework for cryptos. ​ ​

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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.
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