Weaker dollar boosts oil and gold; Bitcoin remains heavy

• Oil tentatively finds a bottom on improving demand optimism
• Gold stuck in a tight range; hovering around $2000 level
• Bitcoin traders remain in wait-and-see mode on the regulatory front

Oil

Crude prices rebounded after a better-than-expected German sentiment report and as energy traders started to see Europe struggle to reliably replace Russian crude supplies.  Last week, oil’s rough week had too many holes poked into the short-term crude outlook, but some of that pessimism might go away this week if earnings continue to impress and if the US quarter posts a solid 2.0% or better reading with first quarter GDP.

Earlier today, a couple tankers gave up after waiting almost a month for Iraqi Kurdish oil. This is a reminder that the oil market is going to remain sensitive to replacing the sour crude it was getting from Russia. Not all crude grades are equal and can easily replace each other.

WTI crude is also getting a boost from a weakening dollar and that trade could continue throughout most of the year as the Fed will probably get priced in for delivering more rate cuts than the other major central banks. 

Gold

Gold is trying to get back where it belongs, above the $2,000 an ounce level.  A weakening dollar is helping send bullion higher as investors start to grow more confident that the Fed will have to deliver more rate cuts next year.  Wall Street sees something breaking and that allows the Fed to shift gears from its inflation fighting mode.

Gold will benefit from safe-haven flows and continued momentum as Treasury yields slide as Fed rate cut bets grow. Gold’s bullish outlook is based on the risking amount of risk that is on the table: earnings risk, slower lending, financial stability concerns, and sticky inflation. 

Bitcoin

Bitcoin remains heavy until investors get any clarity with the US regulatory path on cryptos.  Despite a weakening US dollar and falling Treasury yields cryptos are tentatively persona non grata for speculators.  Crypto investment is seeing outflows and overall momentum or interest in the space has stalled.  Until crypto traders see a clear positive development on the regulatory side, Bitcoin might remain stuck in a consolidation, currently trying to find the lower boundaries of its trading range.  

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