- Oil’s worst slide in a month as demand concerns grow
- Surging yields weigh on gold
- Binance had a 16,000 bitcoin sell order before the 4 am plunge
Oil
Oil prices declined as the dollar rebounded after a mixed oil inventory report raised demand concerns. Gasoline demand showed unexpected weakness as inventories posted a surprise build of 1.3 million bpd vs. an expected drop of 1.5 million bpd. The headline draw of 4.5 million barrels was larger than expected, but that was because it was the end of maintenance season.
WTI crude is back below the $80 level, and it could continue drifting lower if the strong dollar trade resumes.
Gold
Gold prices are back where they belong. After a tentative dip below the $2,000 level, buyers emerge as investors remain unsure about what to expect with the next wave of earnings and as the debate over the Fed’s path continues. For risk appetite to remain in place, Wall Street must see robust mega-cap tech earnings and become convinced that the Fed won’t tighten rates beyond the May 3rd meeting.
Political, earnings, and credit risks should help send some safe-haven flows gold’s way, but if the king dollar trade returns on expectations that the Fed might need to deliver a few more rate hikes, it could get ugly. If gold doesn’t recapture the $2025 level soon, sellers might easily take over here.
Bitcoin
Bitcoin plunged earlier in Europe as some crypto investors decided to dump large positions before NY got to their trading desks. The Bitcoin drop occurred shortly after 4 am EST, which means they wanted to do it before the next round of earnings and after a hot UK inflation report.
There are some clear signs of exhaustion with the growth of the global crypto market cap, and if we are looking at a consolidation period, this seemed like a good time to get out.
Bitcoin is holding onto the $29,000 level, but if downward pressure continues support does not emerge until the $28,550 region.