Crude prices are taking a moment after the February breakout took prices above levels some analysts thought couldn’t be touched until a couple years down the road. Oil prices were unfazed from both monthly reports from the IEA and OPEC. Both acknowledge the hit to demand in the first quarter and point to an upbeat second half of the year.
The key for whether the crude rally continues is if we don’t see a spike in cases as restrictive measures are eased. With most of Asia celebrating the Lunar New Year holiday, price action on crude could become rather choppy and warrant some profit-taking.
Gold prices are struggling today as lawmakers continue negotiations over President Biden’s COVID relief plan. House Speaker Pelosi’s insistence that the stimulus bill will have a $15 minimum wage likely means negotiations will drag on further as conservative Democrats, such as Senator Manchin will likely remain hesitant to support it.
Gold prices extended their slide on concerns the next week will be filled with West taking on China. The EU will outline their plan on getting China to adopt fairer trade practices and this comes right after a tough first phone call between presidents of the world’s largest two economies. Biden and Xi’s call covered trade, aggressive policies abroad, and human rights abuses.
Part of the stimulus trade for gold is how quickly after this COVID relief bill, how soon will we get to see some infrastructure spending.
Bitcoin hit a fresh record high after announcements from both MasterCard and BNY Mellon confirmed the fundamental shift that financial institutions are committing to cryptocurrencies. The news has been mostly positive for the cryptoverse and steady demand with a tight supply should support higher prices. Improved mainstream acceptance for cryptocurrencies are completely easing most regulatory concerns for now. Bitcoin is on a tear and it could get very interesting to see how momentum traders react to a break of the $50,000 level. The $50,000 level was the ultimate target for many, so it will be interesting to see how much profit-taking occurs.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.