Oil surges on EIA drawdown, silver plummets

Gold Technical analysis, overview, strategies, and levels

The only good news for gold's price has been any negative news that might dent risk appetite, and as a result the gains witnessed intraday yesterday have failed to stick with fresh optimism on a trade deal. A positive DMI (Directional Movement Index) cross has occurred, but most of its main technical indicators remain neutral, and it’s a similar occurrence on its weekly outlook as well. While contrarian strategies are in line with its current consolidatory technical overview, significant items such as tomorrow’s US NFP (Non-Farm Payrolls) report will be important in the context of USD movement, of which gold is priced in, and could entice breakout strategies instead.

IG client and CoT sentiment for Gold

As for sentiment, retail bias is at a heavy long 74% and little changed from yesterday’s bias, though still distant from the extreme long bias of 87% held by larger speculative traders as per last Friday’s CoT (Commitment of Traders) report. The latest figures show an increase in gold long positions by 14,990 lots outdoing a smaller increase in short positions by only 2,215 lots.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

While gold's price has managed to hold its ground somewhat, the same couldn’t be said for silver yesterday, which suffered a price drop back down towards its short-term support level, and where a moving average (MA) cross occurred with its 50-day MA crossing beneath its 100-day MA as seen on the daily price chart.

IG client and CoT sentiment for Silver

That has been of significant harm to both retail and institutional traders, the former raising their bias by 3% since yesterday to an extreme long 94% and the latter raising the bias last week to a heavy long 70% on a reduction in silver short positions by 6,797 lots.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

It was a day of big gains for oil's prices, with the energy commodity’s price surging past its 200-day moving average following not just relatively more positive trade reports but also a larger than expected 4.9M deficit out of EIA (Energy Information Administration). That has kept its initializing (and stalling) bull trend technical overview in play, but where its daily bull trend channel and short-term resistance level have held thus far. Furthermore, there’s a significant fundamental item to bear in mind as we approach the end of the week, as OPEC (and OPEC+) meetings in Vienna will be crucial in determining where oil prices will settle depending on whether they agree to deeper production cuts, something that oil major Iraq has already proposed ahead of the event.

Learn more about oil trading.

IG client and CoT sentiment for Oil WTI

In sentiment, retail bias has shifted to a heavy short 65% as of today morning from a heavy long 66% yesterday, as significant range trading occurs amongst retail traders. As for larger speculative traders according to last Friday’s CoT (Commitment of Traders) report, they’ve gone opposite and increased their long positions and simultaneously reduced short positions, pushing the percentage bias 4% higher to an extreme long 87%.

Oil WTI chart with retail and institutional sentiment

Be sure to request IG’s Weekly & Daily Market Report when you open an account with IG Dubai and get access to the full information on the FX majors, commodities, indices, and Bitcoin.