Commodities and Cryptos: Oil’s strong week, Gold shines, Bitcoin drops on Turkey ban

Oil

Crude prices gave back some of this week’s gains on COVID vaccine shortfalls and concerns that India’s Covid-19 surge is increasing the risks of creating new variants.  J&J vaccine pause and Moderna’s announcement that they will fall short of their vaccine delivery targets for the UK and Canada is a temporary setback for the short-term crude demand outlook.   The J&J clot issue is delaying a key single dose and easily stored vaccine solution.  An abundance of caution could mean we lose a week or two with the J&J vaccine, with some fearing that it will fuel greater vaccine hesitancy given the recent concerns with the AstraZeneca one. 

WTI crude is still poised to continue to rise higher on an improving crude demand outlook and expectations that both US and OPEC+ output will gradually increase over the coming months. 

Gold

Gold got its mojo back after Treasury yields retreated below key technical levels and China greenlighted banks to hold more gold imports.  Today is a great day for gold as its strength is accompanied with modest dollar weakness and a softer Bitcoin.  Gold’s bullish case is here as Wall Street awaits to see what type of inflation unfolds over the next several months.  Treasury yields will eventually grind higher, but now investors can become more upbeat on gold. 

Bitcoin

Bitcoin stumbled after Turkey’s central bank banned the use of cryptocurrencies and crypto assets for purchases.  Turkey’s crypto market was rapidly growing as everyone wanted to abandon holding liras.  The outlook for the Turkish lira is for further pain and that is why the central bank is coming down on cryptocurrencies.  Turkish capital controls and further restrictions on lira movement is a regional story and should not pose a greater risk for Bitcoin. 

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