Commodities and Crytpos: Oil pares some of yesterday’s losses, Gold steady, Bitcoin rises

Oil

Crude prices shrugged off reports that a Saudi Aramco refinery in Riyadh was targeted by drones.  The Saudi energy ministry noted that the attack led to a fire that was controlled but did not impact any oil supplies.

A stronger dollar is weighing on oil prices, but it seems the brunt of the selling pressure due to crude demand concerns has now mostly been priced in.  Europe looks like they could have another two months of staggered lockdowns, but now that the AstraZeneca COVID vaccine has received many votes of confidence, vaccinations will resume.  Germany and France continue to struggle with COVID-19 and Italy seems to be done with the worst of the latest surge.  Vaccine hesitancy is a big concern, but the UK’s success should alleviate some of fears.  If the UK is able to enter the next stage of their reopening on March 29^th, that should help bolster confidence with the AstraZeneca vaccine. 

WTI crude is still licking its wounds from yesterday, but seems to be showing signs of it could be stabilizing.  The short-term crude demand outlook took a big hit from a longer delay in a return to normal global air travel.  The second half of year is still looking very good for oil prices, so any other major pullbacks will likely attract many buyers.  WTI crude has key support at the $58.29 level, but if that breaks, technical selling could target the $54 region.  

Gold

Gold is well off the post-Fed highs, but still looking to finish the week on a positive note despite a strong move higher for Treasury yields.  Gold ETF outflows continued for a sixth consecutive week, but the pace is slowing. 

The next few months will be very tricky in identifying what will be the primary catalysts for bullion investors. Wall Street will remain fixated on the bond market selloff and recent disdain for technology stocks.  Gold is starting to attract some investors because eventually rising Treasury yields will surely be countered by Fed action.  The S&P 500 index won’t be able to climb higher if mega-cap tech stocks don’t get their groove back and any hesitancy in that trade should trigger some safe-haven flows into gold. 

Bitcoin

Some Bitcoin traders apparently want to be long heading into the weekend.  Bitcoin made fresh record highs last weekend and some traders don’t want to miss out if that happens again this weekend. Bitcoin breached the $60,000 level last weekend and many active traders will abandon ship if it is unable to hold that level over the coming days.    

Bitcoin is rising again as retail and institutional interest remains healthy. Bitcoin sentiment is dangerously become too bullish as regulatory fears have faded significantly despite the risk staring it right in the eye.

Also adding to today’s bullish momentum was Deutsche Bank’s research team note that stated that Bitcoin “could continue to rise” further if interest continues to grow. 

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