CoT extreme long bias rises in gold; silver and oil majority long bias also up
Gold and silver clear beneficiaries on Friday, oil lags on trade war and recessionary risks.
GOLD: A clear beneficiary of a worsening trade war and rising geopolitical tensions
Another week, and – yet again – gold manages to register another week of gains. This time around however, it was down to Friday’s surge that without it would have been a week of retracement. Weakness in the greenback and a clear flight to safety put the precious metal back at its short-term resistance level, and aiding retail traders whose majority long bias dropped 4% on profit-taking. As for institutional bias, it’s a notch higher at an extreme long 87% thanks to an increase in longs by 6.1K lots and a simultaneous reduction in shorts by 3.8K lots. From a technical overview standpoint, all its main indicators are flashing green, but the catalyst has – and will likely remain – a combination of risk-off events and USD weakness.
SILVER: Finishing the week higher on USD weakness and precious metal demand
Silver has usually been the underperformer compared to gold, but with the US dollar weakening and demand for precious metals rising, it has managed to score another week in the green following retracement early on. All its technical are flashing green, though as with gold the fundamentals have been the reason in doing so. Retail bias is still extreme long but has dropped only 3%, with the majority of those longs initiated at higher price levels. Institutional bias has risen by 3% to a heavy long 66%, due to a larger reduction of silver shorts by 9K lots than a 1.5K lot reduction in silver longs.
OIL – US CRUDE: Trade war and recessionary fears keep oil prices in the red
While the moves for this pair have been largely consolidatory on the weekly outlook, short-term negative bias has started to form slightly with its price beneath all its main long-term daily moving averages and on the verge of crossing below its 200-week moving average. The source of negative movement however, has been expected weakened demand as recessionary fears rise and the trade war worsens. While oil has been a hedge against inflation, OPEC rarely doesn’t intervene to prevent further oil price drops. It’ll be more difficult this time around as its market share continues to dwindle on a combination of member output reduction and simultaneous increases in US production. In terms of bias, retail sentiment rose 6% on Friday to a heavy long 66%, while institutional bias is up 5% to an extreme long 82% as the 50.5K lot reduction in shorts outdoes a 18K lot reduction in longs.
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