Daily Market Report: Gold, Silver, & US Oil
Silver outperforms compared to gold once again, oil lags despite massive EIA deficit.
GOLD: Relatively rangebound movement but finishing higher against the greenback
The movement in this pair’s price has stalled somewhat near the highs, but the bullish technical outlook remains intact with nearly all its main technical indicators flashing green, but a non-trending ADX potentially enticing contrarian strategies for a reversal strategy off the highs. However, it’s a fundamental day today with the ECB’s decision a big one, and although this pair isn’t priced in euros, the effect of the central bank’s case for monetary easing would make non-yielding assets more attractive, especially in an era where geopolitical tensions have thus far failed to subside and where the Fed would be pressured into responding. Going into today’s event both retail and institutional traders are holding heavy long bias.
SILVER: Outperforming against gold once despite a price drop earlier this morning
Once again, silver’s price has outperformed compared to gold’s, pushing past yesterday’s 1st Resistance level and breathing life into the pair’s technical overview of an initializing bull trend. However, some of those gains have been undone as of this morning, and range-trading shorts who weren’t expecting volatility in a pair that had been sedate for most of this (and last) year have been in for a surprise. All its technical boxes are flashing green, and a moving average cross occurred yesterday with its 50-day crossing over its 100-day. The greenback only slightly lagged, and more retreat will be needed for gains to continue to aid extreme long retail traders whose bias is unchanged at 86%, as well as institutional traders whose bias is at a more modest 61% long.
OIL – US CRUDE: Plummeting back below its long-term MA’s despite EIA deficit
EIA’s deficit came in at far more than the expected 4.2M and nearly identical to API’s deficit of almost 11M the night before. Yet, despite a relatively lagging greenback in the FX market, oil prices tumbled and undid gains made on Tuesday. As it stands, its price is back below all its main moving averages – both short-term and long-term – and with its ADX showing an ongoing propensity to trend. Geopolitical tensions have failed to subside which could keep prices bid, and yet demand side worries are a cause especially with US manufacturing data a disappointment. Any price drop wouldn’t be good news for either retail or institutional traders with both holding heavy to extreme long bias, the former raising that bias by 2% as fresh shorts get enticed into closing out while longs anticipating gains enter.
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