Brent and Crude oil prices are trying to recover their losses today. There is too much drama and false information, and traders are confused about it. The fact that Saudi Arabia has denied any discussion about an increase in oil supply with OPEC and its allies has supported the market today. Yesterday, the sell-off was chiefly triggered on the back of this news when several news outlets reported that the cartel would be increasing its oil supply and its allies by nearly 500K bpd. The news made no sense when it was released, and this is because Saudi Arabia only recently went against the US and made the cartel decrease oil production, which caused a rift in the relationship between the US and Saudi Arabia. The country made it clear to the US that Saudi Arabia will not allow the prices to go through the same mess as they did before, and it said that the decision is governed by demand.
In the future, we expect oil prices to remain highly volatile, especially ahead of its meeting, which will take place next week. There will likely be several rumours in the market, and traders are most likely to be sensitive to every single headline. If Saudi Arabia seeks to mend its relationship with the US, then the chances for an increase in the oil supply will be much higher. However, if the cartel keeps oil production unchanged or even reduces the oil supply, the message will be once again simple. The cartel is more interested in keeping oil prices stable rather than paying attention to the needs of the US.
Gold
The shinning metal’s price is also likely to be volatile today as a number of Fed members will be speaking today. Again, traders would like to see a more coherent message from the Fed, but unfortunately, Fed members, most of the time, create more noise than anything. An absence of a coherent message will confuse traders, and we could see a sell-off in the US equity market, which may make traders buy some protection in the form of gold.
As for the gold prices, as long as the fed members indicate that they are ready to reduce the pace of interest rate hikes, we are more than likely to see a retracement in the dollar index, which could be positive for gold prices. This means we could see the yellow metal’s price moving higher. However, if the message comes out that there is a long way to go to achieve their target and plenty of work still needs to be done, then we are likely to see more momentum backing the dollar index, which could influence the gold price adversely.
Cryptos
In cryptocurrency, the risk of contingency continues to linger, and traders are more worried about this now than before. The news, which indicated that another crypto exchange, Genesis needs a capital injection of 1 billion USD, shows how interconnected this whole world of crypto is. Having said this, traders must keep one thing in mind: the issue with the FTX or any other exchange is not the problem with cryptos but with individuals or corporates who have failed to use the correct measurements and good practices purely because of their dishonesty or greed. The issue is not with the space as it is still flourishing, and the value that Bitcoin provides hasn’t changed, and it will not change. But the confidence in the industry has been shaken up, and this is not a positive thing for now. Traders should keep an eye on Genesis and other exchanges, which could also be coming out of their closet and seeking more capital. A failure of another exchange could further hurt the sentiment and, as a result, see the bitcoin price breaking 15K.