Oil slips after another bright start
Oil started the day on the front foot but slipped as the US open approached and have been lower since.
It’s been a remarable rally for crude in recent months, with OPEC+ giving it one final push last week after deepening cuts, thanks largely to Saudi Arabia. The decline came just as WTI hit its highest level in around a year, which may have contributed to some profit taking.
Near-term risks remain for oil markets, with Covid causing huge problems in many countries which means we’re likely to see more restrictions for longer. The action from OPEC+ may limit the downside but a little profit taking may kick in soon enough.
Gold flat as yields pull back
Gold is relatively flat today after stabilizing around $1,850 in recent sessions.
This was a major area of support late in the summer so may be having a psychological impact this week. Fed policy makers have eased concerns about a taper tantrum which has taken the edge off yields and, in turn, the pressure off gold prices.
Whether that will lead to a sustained decline in yields or not is another thing. A move back below 1% on the 10-year could be a positive sign for gold, which has a lot of lost ground to make up after it crumbled last week.
Slow comeback for bitcoin
Bitcoin is staging its comeback, albeit at a more moderate pace than we’ve become accustomed to seeing.
ECB President Christine Lagarde’s scathing verdict on bitcoin were brushed aside by a community used to being cast aside by people in positions of power.
While some may even view this positively, a badge of honour even, it shows the challenges the cryptocurrency faces in becoming mainstream even if it can become a more stable currency, which it has shown no signs of doing.
Lagarde dismissed its prospects of becoming a currency and correctly labelled it a highly speculative asset. It has many enormous obstacles to overcome.
