Oil pares gains, gold eases, bitcoin pulls back

Oil pares gains

Oil prices are pulling back once again today, with WTI just below $53, off just over 1% on the day. We may be seeing a little profit taking in crude prices against the backdrop of a stronger dollar. They’ve been on a remarkable run in recent months but the dollar is enjoying a modest recovery which is likely to drag a little.

The outlook is still positive for crude, despite near-term risks to the economic outlook. OPEC+ has shown they’re more than up to the challenge of the pandemic and reaffirmed that last week, which is why prices remain buoyed and will likely be well supported. An interesting support level for WTI could be $50, should it pull back that far, not that there’s many signs it will at this stage.

USD keeps pressure on gold

The dollar rebound comes even as US yields ease off a little today, following Powell’s comments on Thursday. Interestingly, gold is showing some resilience, albeit from very low levels. It remains stuck in a range between $1,820 and $1,860, since plunging following the Georgia run-off.

If the dollar picks up any more steam, it could create near-term challenges for the yellow metal with major support levels not too far below. We could see some support around $1,800 should $1,820 fall, with $1,765 then being a major level below.

Bitcoin stumbles at $40,000

Bitcoin fell just short of $40,000 following its impressive rebound from its fall at the start of the week. It remains in a strong position despite pulling back once again, with the sell-off not generating any significant momentum yet, by bitcoins own standards.

Obviously, being a highly speculative instrument means that could change very quickly in either direction. A break above $40,000 could be the catalyst for another powerful rally, with a new high opening the possibility of a rapid rise to $50,000.

Downside risks are always present with bitcoin and while $35,000 may provide an interesting test, the only level that really matters is $30,000. A break of this could trigger a much sharper correction.

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