Bitcoin explodes, gold higher, oil pauses

Gold sets sights on USD2,000

Gold has burst higher and hit a more than six-week high today as the dollar came under pressure in anticipation of a Biden victory. The yellow metal flew through yesterday’s high around USD1,920 and the October peak around USD1,930 fell soon after. The triggering of stops just above here likely contributed to the acceleration after this point as gold rapidly rose to USD1,950 before profit-taking kicked in. It seems those in the markets are far more confident that the race is done than everyone else, and gold, like other risk assets, is reaping the benefits. Assuming they’re right, it may not be long until gold is testing USD2,000 again.

Bitcoin explodes above USD15,000

Bitcoin has been driving higher since mid-October but the price exploded today as it smashed through USD14,000 and then USD15,000 shortly after. It’s settled around these levels taking its gains for the day to a more modest 7%. I’m sure people will try and attribute this to the election and the narrative may suit some but the cryptocurrency hasn’t been aligned with risk assets for much of the last month so I’m sceptical.

Central banks going back into easing mode may also be an explanation for some, with the low around USD4,000 having occurred back in mid-March.  Whatever the reason, a break above USD15,000 for the first time since January 2018 is big and will certainly generate a lot more interest once again.

Oil ends three-day rally

Oil has enjoyed a remarkable recovery this week but it’s finally running out of steam, with profit-taking seemingly kicking in. Brent crude has broken and held above USD40, which will come as a major relief for producers in the OPEC+ group. It was getting to a point where urgent action was looking necessary but the bounceback this week takes the pressure off, at least until the JMMC meeting in a couple of weeks.

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

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