Oil slips while gold ticks higher

Oil seeing more profit-taking

We may be seeing a little profit-taking in oil prices after a remarkable run over the last couple of months. Brent and WTI fell more than 2% on Friday and are adding a little to that again today. While we may see a little more softness in the coming weeks, especially if broader risk appetite doesn’t improve, crude continues to be well supported by the actions of OPEC+.

Of course, there are always downside risks that will continue to be monitored. Lockdowns are a near-term growth risk that are becoming stricter and prolonged. Of course, the vaccine is the light at the end of the tunnel, here. US shale output is another, given the healthier state of prices. That may make the challenge of bringing production back online more challenging for OPEC+ but shouldn’t cause any oil price shocks in the near-term.

Gold edges higher despite stronger dollar

Gold started the week on the backfoot but has turned things round to trade USD5 higher on the day, once again finding support on approach to USD1,800. This is positioning itself as a strong support level for the yellow metal, but it faces strong opposition from the dollar as it comes back into favour.

That may not last but in the short-term, yields remain elevated and the greenback is reaping the rewards. If USD1,800 falls, it could be a psychological blow but the late November low around USD1,765 will then become the real test. A break of this could see remaining gold bulls abandon ship.

Has bitcoin entered a consolidation period?

Bitcoin appears to have entered into a consolidation period amid all of the volatility this month. We’re not exactly talking narrow ranges here but it does appear to have settled down a little. For how long though? I don’t think anyone thinks the wild moves of the last few months are behind us. It’s more a case of when the next burst of activity will happen and in what direction.

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