Commodities and Cryptos: Oil finishes on a high note, Gold back above $1800, Bitcoin Cash fraudulent press release

Oil

Crude prices are finishing the week on a positive note as the energy traders digest all the near-term risks.  This week, Iran signaled they are ready to restart nuclear talks at the end of the month, President Biden is weighing tapping the SPR, US production is rising, and OPEC+ resisted calls to increase output faster over short-term crude demand concerns.

WTI crude was unable to extend gains after a strong NFP report that suggested the labor market recovery is back on track.  The oil market deficit is firmly in place and that should limit downward pressure with crude prices.

Gold

The only thing that matters for gold traders is what happens in the bond market.  Risk appetite was strong today as US job growth impressed in October and the prior two months had significant upward revisions.  Today is not a day to talk about the lack of desire to hold safe-havens, but focus on how the market is repositioning itself.  Wall Street went from pricing a few rate hikes next year, to only feeling confident about one increase.  Today’s strong jobs report does not change the message that the Fed sent this week that they will not commit to a rate hike in 2022 and this is why real yields are finishing the week lower.

Risk appetite is too strong for gold to have a sustained move above $1800, but it should see that level as strong support going forward.

Cryptos

Hackers were able to get a news release out that Kroger will accept Bitcoin cash.  This was quickly repudiated, and Bitcoin Cash quickly gave back all of its earlier gains.  The fraudulent press release did not impact the price of Bitcoin.

Bitcoin is trading slightly higher for a handful of reasons that include increased demand for inflation hedges, a much more friendly environment from New York City, and continued retail and institutional interest with new products.   All over the world, Bitcoin products are gaining more attention, from the US and their new ETFs to Australia and their new spot Bitcoin ETF.

Bitcoin is struggling to return to record high territory as too many investors can’t pass up the easy trade that is buying equities.  Bitcoin’s consolidation might extend a little longer, but the bull case is firmly intact.

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