Oil tentatively lower on disappointing Chinese data

• Goldman Sachs eyes a significant crude deficit in the second half of the year
• Markets price in 25% chance Fed cuts at December 13th FOMC meeting
• Bitcoin supporter Novogratz expects Bitcoin ETF gets done by end of year

Oil

Crude prices are lower as China’s economic recovery stalled and as Libya resumed production at key oil fields.  Oil won’t catch a bid unless China finally unleashes meaningful stimulus that propels large parts of the economy.  Little rate cuts here and there and support for property markets won’t do the trick for revitalizing the China recovery trade.   If China doesn’t appear strong the global growth outlook will get slashed and that could keep oil prices heavy a while longer.

WTI crude has major support at the $70 level and should consolidate above here until we hear from Chinese officials at the end of the month.

Gold

Gold’s rebound will have to take a break until we know for sure if the Fed is done raising rates at the July 26^th FOMC meeting.  The labor market is still hanging in there, but expectations remain for it to gradually weaken.  Earnings season will be key for the precious metal because more Fed tightening might need to get priced in if corporate America is too optimistic about both a recession being avoided and that consumer resilience will remain.

Gold may start to form a broadening formation here between the $1945 and $1965 range.

Bitcoin

Bitcoin remains anchored until the cryptoverse gets an update with any of the latest bitcoin exchange-traded-fund (ETF) applications. We are approaching crunch time for getting the final comments from all the top Bitcoin ETF applications.  There has been some progress in small crypto companies finding banks that can help facilitate transactions, as Customers Bancorp has emerged as the winner from the downfall of Signature Bank and Silvergate Capital Corp.

Bitcoin’s range of $29,500 and $31,500 may hold until we get a major crypto headline.

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