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Commodities

Gold fast losing the battle to Bitcoin

The world’s flagship crypto Bitcoin impressive gains partly responsible for seeing massive investors outflows from another popular inflation hedge gold.

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gold, Gold fast losing the battle to Bitcoin

The precious metal is losing its safe-haven status to Bitcoin, the relatively new digital asset, as it settled at its lowest price level since December 14, 2020.

What you should know: Gold spot prices closed at $1,849, printing losses of 3.39% at its last trading session.

READ: Crypto market breaks past $1 trillion for the 1st time in history

The recent surge in the U.S. Dollar Index is weighing on gold prices, not forgetting Bitcoin that has attracted recorded inflows as it hits a new record high, is more likely stealing some of the global investors’ buying interest that would have in the past been directed to gold and other precious metals.

READ: Bitcoin on a grand slam win, trading at $41,200

  • The world’s flagship crypto, Bitcoin impressive gains partly responsible for seeing massive investors outflows from another popular inflation hedge gold.
  • The safe-haven asset had been in the past been surging with Bitcoin, which is up over 40% from $28,000 sighted last week.

READ: Crypto company, Paxos seeks approval to be a U.S National Bank

The bearish macro of very little risk aversion in the marketplace at present is “working against gold amid massive gains seen in global stocks

In a recent tweet seen by Nairametrics, Charlie Morris, founder, and CIO at ByteTree Asset Management said that the price correction in the yellow metal might be attributable to investors moving to Bitcoin;

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  • “With bond yields up and inflation expectations down today, gold has taken a hit. This justifies a $50 sell-off, but the price is down to $120. I’d attribute the excess to flows moving towards Bitcoin.”

READ: Unknown identity moves $117 million worth of Ethereum

READ: Nigeria’s inflation rate to moderate by first half of next year

However, a highly revered gold investor, Petter Schiff kept his hopes on the bullion asset, based on the prevailing narrative that the global economy wasn’t out of the woods yet;

  • “Recent weak economic data on jobs is causing investors to buy risk assets and sell safe-havens like #gold. The weaker the economy gets the more money the Fed prints to prop it up. So, the real risk is inflation, and once investors understand this, they will seek safety in gold.”

READ: Higher demand for nurses and other medical staff as UK job market strengthens

Stanbic 728 x 90

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Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Commodities

Oil prices surge over China’s growing appetite for energy

British based contract ticked up by 0.3% to trade at $63.59 a barrel while the WTI futures edged near $60 a barrel.

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Where next for oil prices?, Brent crude futures gained 0.14 to trade at $34.70 at the time this report was drafted, recovering some of its losses earlier in the oil trading session. , Brent crude price fails to remain over $40, concerns over pledge cut strengthens

Oil prices rallied high at the second trading session of the week as data from the world’s second-largest oil consumer’s (China) import growth picked up coupled with rising tensions in the Middle East after rebels from Yemen disclosed that they fired missiles on Saudi’s energy infrastructure.

At the time of writing this report, the British based contract ticked up by 0.3% to trade at $63.59 a barrel while the West Texas Intermediate futures edged near $60 a barrel.

READ: Oil prices soar above $70 a barrel over terrorist attacks on Saudi’s oil station

The world’s second-largest economy recorded impressive gains for last month in yet another boost to China’s economic recovery as global demand gained momentum. Crude oil imports into China surged by 21% in March from a low base of comparison a year earlier.

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the parabolic of the energy market, as oil traders seem to be uninspired on the resurging COVID-19 virus;

“The oil market’s magnetic attraction to the $63 level should tell us much about the near-term outlook amid conflicting signal of new Covid waves coming to shore ahead of what should be a summer gasoline buying bonanza.

READ: Did OPEC+ April fool the oil market?

But overall, this is an oil market that feels completely uninspired outside of a few micro lurches here and there.

Still, positive comments on the US economy from Fed Chairman Powell help to reassure the outlook for oil demand, balancing concerns about the continued spread of Covid-19 in some regions.”

What to expect

Recent price actions suggest oil traders might hold the $60 a barrel baseline in the near term even if U.S Treasury yields surge while struggling to resolve with what form and fashion the next leg of the reflation trade will take.

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Commodities

Oil prices stay on course as Saudi’s Energy Minister reassures traders

British based oil contract traded at about $63 a barrel while the WTI futures were trading slightly below the $60 price level.

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Crude oil prices slump, as partial lockdowns resume

Crude oil prices remained relatively firm at the early hours of Friday’s trading session as oil traders digested Saudi Arabia’s defense of OPEC+ plans in raising output thereby capping gains.

At press time, the British based oil contract traded at about $63 a barrel while the West Texas Intermediate futures were trading slightly below the $60 price level.

Saudi energy minister Prince Abdulaziz bin Salman recently revealed that there were no pressing concerns of demand/supply dynamics changing gear amid the gradual boost in outputs in an interview aired on Thursday, adding that OPEC+ had all ammunition put in place to change course if necessary. OPEC+ will continue to meet monthly on reviewing the energy market supply dynamics.

READ: Has the Naira been devalued?

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the prevailing market sentiment amid macros pointing to more oil supplies hitting the sensitive energy market and an upsurge in COVID-19 caseloads.

“Positioning is much cleaner, although the market remains directionally long oil. However, the sudden calm and drop in volatility have attracted passive investors back to the fray as the market structure around prompt spreads start to tighten and the dollar begins to roll over.

“Still, the conflicting signals around OPEC+ supply coming back to market amid spiking coronavirus case numbers in India plus parts of Canada as well as Tokyo backtracking into the lockdown Abyss, together with reports linking the UK’s Covid-19 vaccine workhorse to the higher frequency of blood clots, continues to hold the bulls at bay.”

READ: Did OPEC+ April fool the oil market?

What to expect: The most recent OPEC+ agreement on releasing barrels into such present demand was not out of place – suggesting the futuristic price of oil might range between the $60 -$70 price levels with production normalization vs current high excess production capacity taken into consideration.

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