Commodities and Cryptos: Oil extends decline on Iran talks date, Gold pared losses post Fed, Bitcoin flashed lower

Oil

Crude prices were little impacted by the dovish Fed taper announcement but did extend declines after reports that a date has been set to restart Iran nuclear deal talks.  Tasnim News Agency (Iran press) reported talks will start on November 29^th

Earlier, it was all selling pressure for oil prices after a mostly bearish EIA report showed production picked up, stockpiles grew larger-than-expected, and as the crude demand outlook over the short-term remains unclear.  US production increased by 200,000 bpd, returning to pre-Hurricane Ida levels. 

This week is all about OPEC+, so the weakness hitting Brent crude should run out of steam.  Brent crude has major support at the $78.70 level, as expectations are high OPEC+ will ignore calls to pump more oil. 

Gold

Gold prices pared earlier losses after the Fed signaled it is reading to start pulling back pandemic aid, while signaling they expect pricing pressures to ease in the second or third quarter.  It was a dovish taper and a clear signal that we will have to wait until the summer to hear them admit they are wrong about inflation.  Wall Street got a bit aggressive with rate hike expectations and while yields should still rise, it might be at a slower pace which is good news for gold. 

Gold prices are facing a plethora of resistance around the $1790, but that might not hold as investors will have to wait and see if the Fed is making a policy error.  Treasury yields will climb higher at a slower pace and the risks to the outlook now include a Fed policy mistake, which could send the economy into recession. 

Bitcoin

Bitcoin dipped following the release of the FOMC statement, which showed the largest economy in the world just announced the last call for their ultra-accommodative stance.  The Fed is tightening, but the ‘printing of money’ will go on a while longer for the US and several nations.  The formal taper announcement was well telegraphed but the dip in Bitcoin did unnerve some investors. 

The Fed’s tripling down on their inflation will be ‘transitory’ bet and that might lead to a policy mistake, which should trigger massive inflows for Bitcoin.  Bitcoin remains in a consolidation pattern, but the Fed’s start of reducing its asset purchases should not derail the longer-term bullish case for Bitcoin.  

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