Commodities and Cryptos: Oil market getting tighter, Gold battered as yields rally, Bitcoin in danger

Oil

A tight oil market just got hit with supply disruptions and geopolitical risks, which means oil prices are headed higher.  Oil prices were boosted after growing unrest in Kazakhstan posed a risk to their 1.6 million barrels per day of production.  Insurgents were responsible at the beginning of the year for sending Libyan production to the lowest levels in more than a year. 

Energy traders are growing very confident this market will remain very tight and now that omicron worries have eased oil prices could have an easy path towards the highs seen in November. 

Gold

Gold traders knew it was going to be a bloodbath after real yields had a major breakout.  The hawkish Fed minutes triggered massive selling pressure for gold and that should be over until the nonfarm payroll report.  If the December payroll report delivers a massive beat, the pain could continue for gold.

The March Fed policy meeting will be a live one and that should continue to support the move higher with Treasury yields, but that doesn’t mean gold will continue to remain in the house of pain. Wall Street has priced in a lot of the Fed hawkishness and US growth exceptionalism verses abroad, but that trend won’t continue deeper into the year and that should translate into higher gold prices.

Bitcoin

Cryptocurrency traders are no longer confident that the $40,000 level may hold. Massive liquidations that totaled over $800 million could have Bitcoin on the ropes for one last major plunge before buyers will be willing to test the waters.  Bitcoin could see a plunge towards $37,000 before buyers emerge.    

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