- Oil is getting crushed as the outlook for demand continues to deteriorate
- Gold rises as Fed hike bets no longer fully price a quarter-point rate hike
- Bitcoin is finding some preliminary support at the $27,200 level
Oil
Oil prices fell as the dollar rose and crude demand signals remained largely bearish as Halliburton signaled that customers are clearly motivated to produce more oil and gas. The one positive news for crude oil was the positive outlook from JetBlue on robust demand trends in the second quarter. Energy traders do not buy this dip until they have clear signs that the sky has stopped falling. Concerns about China’s rise will not go away until we see strong signs that crude oil demand is improving. Unless we see a quick return of risk appetite to Wall Street, it could turn uglier for crude oil prices. ?
Gold
Gold struggled initially as the dollar staged a comeback as investors entered risk-free mode. Gold is still a safe haven, but today it let the dollar have its day in the sun for a little while. The progress on the debt ceiling took away some of gold’s appeal, as insiders see President Biden’s re-election announcement as a boost to Speaker McCarthy’s chance to get this bill passed by his fellow Republicans. Gold remains near the $2,000 level, and if the carnage on Wall Street turns uglier, investors will eventually pile back into the precious metal. ?
Everything changed for gold when Wall Street lost confidence in First Republic Bank. Gold remains an important safe haven for Wall Street, and now that the banking crisis is back, gold is poised to rally.
Bitcoin
Bitcoin was initially lower as Wall Street takes some risk off the table. Bitcoin still proves to be a risky asset as it is in the red along with all the other major asset classes. Earnings risks, more Fed tightening and regulatory fears continue to weigh on crypto. The return of banking fears helped send some flows Bitcoin’s way. Bitcoin is higher by 0.9% on the session following the news that First Republic is fighting for survival.
Coinbase made the decision to sue the SEC to get clarity on crypto regulations in the US. This could put pressure on the SEC to make a decision a little sooner than they expected. Coinbase clearly wants to be able to operate in the US, and they hope this lawsuit will give them clarity much sooner, so they can make the right business decision. ?
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With more than 20 years of trading experience, Ed Moya is a senior market analyst at OANDA, producing up-to-date intermarket analysis, coverage of geopolitical events, central bank policy and market reactions to corporate news. His particular expertise lies across a wide range of asset classes, including currencies, commodities, fixed income, equities and cryptocurrencies. During his career, Ed has worked with some of the leading forex brokers, research teams and news departments on Wall Street, including Global Forex Trading, FX Solutions and Trading Advantage. Most recently, he worked with TradeTheNews.com, where he provided market analysis on financial data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks, including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most respected global news outlets, including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
