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Commodities And Cryptos: Oil Market Getting Tighter, Gold Battered As Yields Rally

By Ed MoyaMarket OverviewJan 06, 2022 04:14PM ET
www.investing.com/analysis/commodities-and-cryptos-oil-market-getting-tighter-gold-battered-as-yields-rally-200613912
Commodities And Cryptos: Oil Market Getting Tighter, Gold Battered As Yields Rally
By Ed Moya   |  Jan 06, 2022 04:14PM ET
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Oil

A tight oil market just got hit with supply disruptions and geopolitical risks, which means oil prices are headed higher. Oil prices were boosted after growing unrest in Kazakhstan posed a risk to their 1.6 million barrels per day of production. Insurgents were responsible for sending Libyan production to the lowest levels in more than a year at the beginning of the year. 

Energy traders are growing very confident this market will remain very tight, and now that Omicron worries have eased, oil prices could have an easy path towards the highs seen in November. 

Gold

Gold traders knew it was going to be a bloodbath after real yields had a major breakout. The hawkish Fed minutes triggered massive selling pressure for gold, and that should be over until the nonfarm payroll report. If the December payroll report delivers a massive beat, the pain could continue for gold.

The March Fed policy meeting will be a live one, and that should continue to support the move higher with Treasury yields, but that doesn’t mean gold will continue to remain in the house of pain. Wall Street has priced in a lot of the Fed hawkishness and US growth exceptionalism versus abroad, but that trend won’t continue deeper into the year, and that should translate into higher gold prices.

Bitcoin

Cryptocurrency traders are no longer confident that the $40,000 level may hold. Massive liquidations that totaled over $800 million could have Bitcoin on the ropes for one last major plunge before buyers are willing to test the waters. Bitcoin could see a plunge towards $37,000 before buyers emerge.   

Commodities And Cryptos: Oil Market Getting Tighter, Gold Battered As Yields Rally
 

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Commodities And Cryptos: Oil Market Getting Tighter, Gold Battered As Yields Rally

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Ron Love
Ron Love Jan 06, 2022 7:20PM ET
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2021 and the few days this year have proven without a shadow of a doubt that crypto is NOT an inflation hedge. As inflation fears increase exponentially cryptos sell of in direct proportion.
 
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