Gold and oil end the week close to where they started

Gold Technical analysis, overview, strategies, and levels

Gold prices started off the week experiencing heavy volatility that aided conformist breakout strategies on both the Daily and Weekly, only for that volatility to drop late last week and testing sell breakout strategies on Friday on a lack of significant follow through beyond its 1^st Support level. It was a non-story against silver, as the gold/silver ratio remained within relatively small ranges defying the significant volatility and silver outperformance witnessed in the weeks prior.

The technical overview remains volatile, but conformist strategies will need a lack of rangebound movement to outperform against contrarian reversals that are at risk of getting stopped out on a trend move, with those looking to avoid increased volatility considering 2^nd levels instead of 1^st.

This week’s calendar includes plenty of US data, but it’s Federal Reserve Chair Powell’s speech regarding monetary policy that may be of greater importance, especially if there’s confirmation that the US central bank will allow for a change in inflation targeting to allow for overshooting to make up for periods of low inflation.

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

In sentiment, both retail and CoT speculators are holding an extreme buy bias and little changed since last week. The latter also remain heavy to the buy side for silver, platinum, and palladium.

Oil Technical analysis, overview, strategies, and levels

Oil prices for the week were once again very rangebound and lacking a play on the Weekly, with intraday volatility picking up late last week and testing buys on its key Support level that while held eventually, suffered significant moves beyond it towards its 2^nd levels. In oil data, Baker Hughes oil rig count for the US showed its first double-digit increase since the start of the pandemic, rising by 11 to 183 though still well below the 600+ figures registered pre-coronavirus. As for manufacturing PMIs, they were better than expected out of the UK and US while disappointing for the Eurozone, and failing to improve on the previous month in Japan.

Learn more about oil trading.

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

In sentiment, retail range-trading was heavier last week, the buy bias now up to 62%. CoT speculators are unchanged as a percentage on a drop in longs nearly matched in percentage terms by a drop in short positions as well.

*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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