Saudis solo-cut oil pop faded, Gold rises, Crypto crushed as Binance Sued by SEC

• Saudis raises prices to Asia after surprise solo-output cut
• Gold rises as Fed hike odds edge lower after soft ISM services report
• SEC goes after Binance and CZ

Oil

The Saudis are going at it alone in doing whatever it takes to stabilize oil prices. ​ The Saudi problem is that energy traders aren’t believing the kingdom has enough power to sway all OPEC+ to deliver meaningful action. ​ The Sunday decision to deliver a solo-cut triggered a near 5% jump on the open, but that quickly disappeared. ​ The Saudis are basically giving up market share here and that strategy won’t work over the long-term. The risk of more cuts seems unlikely given the market reaction, but also because the demand side of the equation should provide some stability for prices. ​ The US economy is about to show a very robust summer travel season that should mean gasoline and jet fuel demand is going to be very strong. ​ The demand situation from Asia can’t be that bad if the Saudis are also able to raise prices.

Oil might remain stuck in a trading range until we see evidence that China’s recovery is improving.

Gold

Gold rallied after the ISM report showed the first major signs that the service sector is cooling. ​ The ISM services report showed prices paid cooled and employment fell to contraction territory, which is raising hopes that the Fed might not have to deliver anymore rate hikes if we see further weakness next month. ​ Gold is holding up nicely, but unless we see a major pullback in the stock market, it might struggle to make an attempt above the $2000 level.

Bitcoin

Bitcoin was traveling aimlessly as Wall Street went back to focusing on both inflation which includes the Fed’s rating hiking cycle and with the tightening of credit conditions which should get worse now that the US has to fill its coffers. The impact from $1 trillion in issuance, aka T-bill deluge, before the end of the year could eventually disrupt the banking sector and be positive for Bitcoin. Bitcoin seems content staying in a narrow trading range and that could continue if risk appetite remains healthy once the Fed pauses.

Everything changed after reports that the SEC sues Binance and CEO CZ.  13 charges against the exchange and it seems the regulatory hammer might be poised to deemed a lot of cryptos as unregistered securities.

Earlier Binance announced that Richard Teng, Binance’s head of regional markets outside the US is expected to be CZ’s heir apparent. Teng is a regulator and that should serve well helping deal with the upcoming negotiations with US regulators. ​ The cryptoverse can’t afford to lose another major exchange and Binance’s success is vital for Bitcoin not collapsing even further.

gold