Flash Crash in Gold, Falling Oil and Rising Cryptocurrencies

The most interesting thing on the financial markets happened yesterday with gold during the Asian session. Flash crash is rare enough to be called something trivial. On the other hand, gold and other assets have repeatedly become objects of planned attacks, market manipulations, banal technical failures and other reasons for flash crashes.

Based on the timing of the fall in gold, everything looks extremely trite: summer, Monday, the low liquid Asian session are ideal conditions for flash crashes.

In general, you should not write off gold from the accounts. It could have reached the key support of 1680. It did. On this it is worth putting an end to the issue of panic and calmly look at the situation. Has anything changed in market sentiment? No. Basic fundamental background? Ultra-soft monetary policies in place. Biden's infrastructure plan is on its way, which means fiscal incentives are here with us. That is, everything that pushed prices in the financial markets in the last year or so is relevant. The fall in gold cannot be attributed to the outbreak of a pandemic either, because it is a safe haven asset.

In total, thanks to gold, which made it possible to buy yourself cheaper.

In general, commodity markets have been under strong downward pressure since last week, and gold purchases can be hedged by, for example, oil sales. Until recently, the oil market ignored the growth in OPEC + production and the increase in the number of cases of COVID-19. But at some point, my nerves broke down and everything fell apart. The latest data on China's trade balance showed that oil imports were declining for the third month in a row, which, coupled with a sharp drop in road traffic in the country (up to 30%) due to restrictive measures, finally undermined the strength of buyers.

But everything grows with the prefix crypto. Comments by Musk, Katie Woods and others at Day B did their job, and faith returned to the cryptocurrency market again. But faith is a very shaky ground that can easily burst into reality, for example, in the form of new taxes on cryptocurrency transactions in the United States, discussed in the infrastructure plan bill, or stricter regulation, or another outbreak of concerns about the unsustainability of mining. Overall, the current growth is a great sales opportunity.