Fresh highs for oil prices, gold loses some shine

Gold Technical analysis, overview, strategies, and levels

Another red week for gold prices with a break beneath last week's Weekly 1st Support aiding conformist breakouts on a long-term volatile overview, while on the Daily breaking beneath its 1st and 2nd Support levels on Thursday that aided contrarian breakout strategies, the short-term showing more negative technical bias and while has been consolidatory on most days is prone to days of clear volatility. Silver's previous weekend gap was undone, but fared slightly better for the week, the gold/silver ratio oscillating in a lower range. While commodities are used as a hedge against potential inflationary pressures, the outperformance award usually goes to oil when there’s expectations of growth which involves higher long-term yields, the lack thereof giving the non-yielding precious metal a better chance.

IG client^* and CoT^** sentiment for Gold

In sentiment, CoT positioning is little changed with gold long positions up by 820 lots and slightly outdone by gold short positions rising 1,240 lots, the extreme buy bias of 85% unchanged since the previous report. Retail bias is little changed since the start of last week and also in extreme buy territory at 88%, close to that of silver retail bias at 89% (silver CoT is 73% buy, platinum 80% buy, palladium 55% buy).

Gold chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

It was a strong week for oil prices, generally giving conformist breakout strategies the edge on most days (late last week tested on Thursday's partial retracement off the highs but giving follow-through on Friday), Weekly conformist buy-breakout strategies enjoying a move beyond last week's 1st and 2nd Resistance levels. It followed three weeks of oscillatory movement that was near the highs, all its key technical indicators flashing green on the Daily and Weekly. As for oil data, Baker Hughes oil rig count showed an increase to 299 active US rigs from 295 prior, another consecutive increase with any price gains enticing more into hedging and restarting/increasing production.

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IG client^* and CoT^** sentiment for Oil WTI

CoT speculators while a notch lower since the week before are still in extreme buy levels, retail traders shifting from the middle at the start of last week to a majority short 61%.

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.

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