European Update – Oil, Earnings, Gold, Bitcoin

European Update – Oil, Earnings, Gold, Bitcoin

MarketPulse  | Apr 21, 2020 13:28

What crazy times we live in

Stock markets are back in the red on Tuesday afer Wall Street endured a shaky start to th week and oil left everyone gobsmacked as it ventured into uncharted territory.

Oil clearly stole the show on Monday as WTI not only ventured into negative territory for the first time ever, it did so in style, plunging hundreds of percent to minus $40 a barrel. The May contract plunged as traders panicked at the prospect of taking delivery of something that had nowhere to go.

The very idea of someone paying someone else $40 to take oil off their hands is utterly ludacrous and yet, indicative of the crazy times we’re living in. Just for some perspective, six years ago WTI was trading around $100 a barrel. At the time of writing, it’s trading at a more modest minus $7.45, who knows where it will finish.

It does make you wonder what’s to come for the June contract. It’s hardly going to be immune from this, although you’d imagine lessons will surely be learned and production cuts will soon catch up. That said, it’s off more than 40% this morning and close to $10 a barrel. Brent crude is being sucked in as well, off more than 20% but still some way from zero.

Earnings takes a backseat but that will change

Earnings took a bit of a backseat on Monday but that will change over the coming days as more companies report, including some big tech names. It wasn’t a great start to earnings season but let’s face it, it was never going to be. The question is whether there’s enough there for investors to feel comfortable. It’s been an impressive bounce off the lows, with the Dow now only 20% from its highs. That seems a bit crazy but we live in a time of unprecedented stimulus which was always going to cause distortions and this will not be any ordinary recession. The next couple of weeks will be very interesting for stock markets.

USD puts pressure on gold prices

Gold is continuing to pare gains, with the dollar putting downward pressure on the yellow metal as it continues to perform well in these risk-averse markets. Gold held up quite well around $1,680 yesterday but with that level coming under pressure already again today, it’s looking quite vulnerable, which means we could be heading back to the lower end of the $1,600 range, with $1,640 the next test below.

Uninteresting times lie ahead

It’s not often that we talk about wild markets and don’t include bitcoin in that bracket. The cryptocurrency has been rangebound between $6,500 and $7,500 for almost three weeks now and at this point, it’s tough to say who has the upper hand. Given the inability to break $7,500, I can’t help but feel the ground below is looking a little more vulnerable but it’s been well defended so far. Perhaps for once, uninteresting times lie ahead.

Disclaimer: This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Original Post


Related Articles

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors. is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.