Commodities and Cryptos: Oil higher as OPEC+ can’t meet commitments, Gold rallies, Bitcoin above $60k

Oil

Crude prices are rallying after OPEC+ failed to hit their production goals and both Kuwait and Iraq signaled they support keeping the gradual 400,000 bpd output plan intact.  The world leaders are likely to be disappointed with the worsening oil market deficit that doesn’t seem like it will get any help from OPEC+. 

The idea of $100 is becoming commonplace as some analysts such as Bank Of America’s Blanch makes a case for $120 oil by the end of June 2022.  The oil market knows Iran won’t get immediate sanction relief, that the crude demand outlook should only improve as global COVID cases continue to trend lower, and that US production will be flat and OPEC+ will stay with a gradual output increasing strategy. 

Gold

Gold prices are rallying as traders await a busy week of central bank rate decisions that should inflation fears are motivating central banks into tightening mode.  Gold has performed nicely despite the rise in global bond yields as some investors grow cautious of the outlook for next year. 

Rapid tightening cycles and unbalanced recoveries could trigger demand for bullion over the coming quarters.  Gold seems poised to consolidate around the $1800 level until financial markets get through the Fed taper announcement and pushback in signaling when rate hikes could happen. 

Bitcoin

Bitcoin prices are hovering above the $60,000 level as volatility eases as institutional interest grows.  According to Glassnode, it seems, the Whales (accounts that hold between 10,000 and 100,000 bitcoins) are accumulating at a faster clip than the smaller trader.  With inflation running wild and central banks poised to tighten monetary stances, a weaker dollar could be what is needed to help send bitcoin towards the $70,000 level. 

This is a big week for bitcoin, as currency volatility will be elevated as Wall Street braces for tightening messages from the RBA, Fed, CNB, and BOE.  If traders continue accumulating bitcoin as central banks shift to rate hiking cycles, that could satisfy many traders’ beliefs that bitcoin prices can run much higher.  

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