US Federal Reserve hawkish meeting sends gold plummeting, oil finishes lower

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Gold technical analysis, overview, strategies, and levels

The technicals had already been pointing to a move back towards a lower average prior to yesterday's fundamental event and hence a 'consolidation-volatile' overview on the weekly report from around mid-May onwards on.

While the daily was a stalling bull trend up until Tuesday when it shifted on expectations of an eventual break to its average, conformist breakout strategies outperforming heavily on a breach of its previous key levels, and an undoing of what little positive technical bias it was enjoying in this time frame on a move beneath key moving averages.

Yields moving higher and a stronger greenback usually spell retreat for the non-yielding precious metal priced against the dollar, especially with a central bank that came off as more hawkish and anticipating both tapering and rate hikes sooner than expected. Silver also suffered keeping the gold/silver ratio in the 67 handle.

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IG client* and CoT** sentiment for Gold

but while retail gold bias jumped back into extreme buy territory and at 81% as of this morning, silver rose to a lower (but still heavy long) 73%.

Gold chart with retail and institutional sentiment

Oil WTI technical analysis, overview, strategies, and levels

Despite the pullback off the highs, WTI Crude (SGD1 Contract) prices didn't offer much follow-through beyond key levels, conformist breakout strategies failing while reversal off the first support level yielding a bit.

The weekly overview has been a stalling bull trend indicating a higher average unlike gold and the daily overview while showing clear positive bias has been showing signs of averaged tendencie,, intraday volatility not as high as expected and in turn meaning contrarian strategies have outperformed despite the trend move higher.

While the Fed's hawkish tone strengthened the greenback and yields, attention prior was on Energy Information Administration's data, showing oil inventories dropping 7.4m (above expectations but below American Petroleum Institute's reading the night before that already took oil prices higher price on the drawdown).

Refinery utilization rates were at pre-pandemic highs, though gasoline stocks rose by 2m opposite deficit expectations, opposite story for distillate with a 1m drop.

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IG client* and CoT** sentiment for Oil WTI

Oil WTI chart with retail and institutional sentiment

_{*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day.}

_{**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.}