As the dollar strengthened and a report on oil reserves raised concerns about demand, the prices of oil experienced a decline. Additionally, gasoline demand was unexpectedly weak, and inventories showed an unexpected increase of 1.3 million bpd instead of the expected drop of 1.5 million bpd. Although the headline draw of 4.5 million barrels was larger than anticipated, it was due to the end of the maintenance season.
WTI crude has fallen below the $80 mark once again, and there is a possibility that it may continue to decline if the strong dollar trade picks up again. The current trend suggests a potential decrease in the future.
Gold prices have returned to their previous levels after a slight drop below $2,000. This is due to uncertainty among investors about the upcoming wave of earnings and ongoing discussions regarding the Fed’s course of action. For the risk appetite to remain strong, Wall Street requires strong earnings from tech giants and reassurance that the Fed will not tighten rates beyond the May 3rd meeting.
Gold is expected to attract safe-haven flows due to political, earnings, and credit risks. However, if the Fed raises interest rates further and the king dollar trade returns, it could negatively impact gold. The $2025 level must be regained soon, or there is a risk of sellers taking over.
In Europe, Bitcoin experienced a significant decline as certain cryptocurrency investors opted to sell their large holdings prior to New York’s opening. The sudden 3% decline in Bitcoin occurred a little after 4am est, indicating that the investors aimed to execute their move ahead of the next earning cycle and after the release of the UK inflation report.
As the global crypto market cap experiences signs of exhaustion, it may be wise to consider a consolidation period and make a timely exit. This is a professional approach to take in the current market conditions. It is important not to overlook any potential indicators of a market shift.
Bitcoin is currently maintaining its position at $29,000, however, if the downward trend persists, the support level may not come until the $28,550 area. It is crucial to keep a close watch on the market to ensure the best investment decisions are made.
