Commodities and Cryptos: Oil pares losses, Gold struggles, Bitcoin steady

Oil

Crude prices pared losses after a strong labor market showed consumer pocketbooks are growing and remote work is declining.  Earlier, WTI crude tumbled below the $100 level as energy traders digested the Biden administration’s third time of tapping the SPR, no surprises from an OPEC+ meeting on output and as Saudi Arabia oil shipments dipped in March.

The knee-jerk selloff from the SPR announcement of the release of 1-million barrels a day from the SPR over the next six months won’t have a lasting impact on oil prices, so if geopolitical risks continue to intensify, oil will recover most of this week’s losses. 

A soft ISM manufacturing report erased some of the earlier gains post nonfarm payrolls.

Gold

A strong employment report has gold on the ropes even as the 2s/10s Treasury yield curve inverts again.  The shorter-end of the curve is steepening and while recession risks for down the road are growing, the economy is still looking very good right now.  Gold seems like it could still trade between the $1900 and $1950 range, but the risks of bearish momentum winning out are growing. 

Chicago Fed Evans might be in the minority as he favors only a quarter-point rate hike at each meeting this year.  Expectations are growing for the Fed to deliver not just one supersized rate hike and that could make things tough for non-interest bearing gold in the short-term.  Eventually, aggressive tightening or persistent inflation will drive growth concerns that will lead to safe-haven flows for gold, but that time isn’t now.  If gold breaks below the $1900 level, support may come from the 100-day SMA at the $1,854 level.

Bitcoin

Bitcoin was initially lower after an impressive nonfarm payrolls report sent Treasury yields surging higher.  Bitcoin has had some exhaustion from its recent rally and could continue to consolidate here.  Earlier in the week, Bitcoin was boosted after Terra blockchain confirmed they bought over $1 billion in Bitcoin since the end of January. Bitcoin seems like it wants to hover here, with prices likely to trade between the $44,5000 and $47,000 levels.   

Bitcoin needs a couple more major investments in order to make a run above the $50,000 level and that might take some time given the global bond market selloff. 

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