Oil and gold tumble as central bank tightening threatens global outlook, Bitcoin at $30k

Oil

Oil prices are going to remain heavy as central bank tightening will kill the global growth outlook. ​ Energy traders will keep a close eye on today’s stockpile that might show a modest draw. ​ The oil market will remain heavy until European inflation eases. ​ Brent crude could make a run towards the $70 region but should rebound once we finally see significant easing come from Beijing.

A bullish EIA crude oil inventory report was unable to stop WTI crude’s selling pressure.  Stockpiles declined by 3.8 million barrels, much than the 1.2 million draw API reported yesterday.  Weekly oil demand climbed to the highest levels since last December.  In fact all key demand drivers (gasoline and distillates) improved from a week ago.  Cushing supplies also declined for the first time in nine weeks. Rig counts are also coming down, which supports the idea that production won’t be going up much further from here.

Gold

Gold prices are declining after central bank-a-palooza saw larger-than-expected tightening across several European central banks. ​ The global growth outlook is getting slashed and that could trigger a safe-haven move back into the dollar and not necessarily gold. ​Global bond yields are surging across the board. The 10-year Treasury yield rose 8.7bps to 3.806%, while the 10-year German bund rose 5.7bps to 2.489%.  The German 10-year Bund yield and 2-year yield inverted to its widest level since 1992.  If technical selling accelerates, gold could see pressure towards the $1900 region.

Bitcoin

Bitcoin is holding onto its gains that came after a few financial giants have made commitments to crypto. Crypto short-sellers did not want to bet against BlackRock’s Bitcoin ETF filing, as that might be triggering optimism the SEC might finally be ready to grant an ETF approval. ​

Bitcoin momentum could make an run towards the mid-$30,000 region, but if the central banks globally remain hawkish, that could kill risk appetite. ​ ​

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic 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, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.

Ed Moya

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