Daily Market Report: Gold, Silver, US Oil
Gold surges on USD weakness, oil up on inventories deficit and geopolitical tensions
GOLD: A clear beneficiary of lowered US rates
Yesterday’s move was both significant and sizeable, as increased Fed rate cut expectations aided in taking gold’s price higher, with non-yielding assets more attractive and especially those holding safe haven status like gold. The pair’s bull trend technical overview is still intact, but there’s no denying the stalling that’s occurred at current levels. The pair’s price isn’t that far from its current short-term resistance level however where it has failed to successfully breach it, but if the greenback continues to drop and geopolitical tensions fail to subside, then that level could get breached more easily this time around. Tonight’s CPI figures out of the US are crucial in determining whether a data dependent Fed can remain dovish regarding inflationary pressures (or the lack thereof).
SILVER: Enjoying a boost from USD weakness and gold’s surge
It was mentioned previously that two factors could aid in taking this pair’s price higher, (1) a weakening US dollar, and/or (2) a significant surge in the price of gold. Yesterday, both those factors were in play, and that helped take silver’s price higher and above the last of its main moving averages. The remaining indicators remain neutral however, and despite the increase its main pivot points have still managed to hold. Going into this evening’s US CPI figures retail traders are holding an extreme long 95% bias, while institutional bias is a more modest majority long 59%.
OIL – US CRUDE: USD weakness, US inventories drop, and rising geopolitical tensions
Yesterday’s EIA US inventories estimate came in at a large 9.5M deficit, surpassing that of API’s the night before and sending energy prices higher. However, it wasn’t the only catalyst, as rising geopolitical tensions continue to test the supply side of the energy commodity, even if demand side worries persist on expected weakening global economic growth. As if that wasn’t enough, there’s also USD weakness to contend with, as oil priced in dollars that are dropping in value would possibly necessitate an increase. From a technical standpoint, while most of the indicators are neutral, there’s heavy technical bias that’s backed by fundamentals that could easily result in further increases, and hence has resulted in a technical overview shift to an initializing bull trend. Keep in mind that on the weekly, the technical outlook is far more consolidatory.
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