Oil tries to fill gap, Gold tries to make another run, Bitcoin’s Coinbase risk

• Oil’s $2 drop on weakening outlook
• Gold higher on Debt drama and earnings risk
• Bitcoin lower on risk aversion and regulatory risks

Oil

Oil is getting crushed as Wall Street starts to get a steady stream of disappointing outlooks and on concerns that sentiment with China’s households and business might not be as robust as some are thinking. ​ China may still need to ease and until they do so, investors might not be fully optimistic about the outlook for China.

Today is mostly a risk aversion session and that is bad news for oil prices. Treasury yields are sharply lower and the Japanese yen the strongest currency. ​

Downside for oil prices should be limited to the gap made from the OPEC+ production cut announcement earlier this month. Despite the short-term risks for crude prices, oil should still find a home north of the $80 a barrel level.

Gold

Gold is trying to muster up the courage for another attempt at record territory as stocks soften as profit and debt ceiling concerns build. ​ Risk aversion is starting to run wild and safe-haven flows are once again coming gold’s way. ​ Too many risks remain on the table and investors are going to need some safety going forward. ​ Debt ceiling drama is around the corner, a couple months away, and as the risks to the outlook pile up, gold is starting to look even more attractive. ​ Gold has major resistance around the $2050 region, but if earnings and the outlooks continue to deteriorate, a record move could be eyed.

Bitcoin

Bitcoin looks like it will consolidate below the $30,000 level as Wall Street will have to deal with a plethora of risks to the outlook: political (debt ceiling), Geopolitical (China), financial stability risk, inflation risk.  Regulatory risk also remains as traders process the news that Coinbase might end up leaving the US market if they don’t like the upcoming regulatory decisions.  Coinbase was able to secure a license to operate in Bermuda, in what is being considered a part of their global push.  If Coinbase leaves the US market, a lot of US traders will be gone because they probably won’t feel confident trading on decentralized exchanges, which means the global crypto market will shrink significantly.

Bitcoin will struggle here until we have any regulatory clarity which means prices seem poised to drift lower.  Key support remains above the $25,500 region.

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