Gold and silver drop on USD strength, oil lags despite geopolitical tensions
Both precious metals in retreat against the top-performing US dollar, while oil lags following EIA surplus with geopolitical tensions failing to subside in the background.
GOLD: Dropping back towards its short-term support level despite a Fed rate cut
Although a 0.25% rate cut by the The Federal Reserve (Fed) ought to make non-yielding assets like gold more attractive, the US dollar was the top performer in the FX market, and brought down gold’s price with it to its short-term support level. That has pushed retail longs higher to a heavy long 72%, and with its consolidatory technical overview continuing to show conflicting signs as its short-term negative technical bias risks turning into a long-term downturn given its 50-day MA isn’t that far off below. From a geopolitical standpoint however, gold’s price may have more room to rise, especially if tensions fail to subside.
SILVER: A lower finish against a stronger US dollar
With Fed out of the way, the question on everyone’s mind is whether silver’s bull run can continue to edge higher, or risk oscillating to the downside on a failure to build positive momentum in the short-term. As it stands, the dollar’s strength and lowered Fed expectations have meant dollar-denominated pairs have slipped a bit, but sentiment hasn’t faltered with retail bias up a couple percent to an extreme long 86%.
OIL – US CRUDE: Dropping back lower as traders await outcome of weekend attacks
Plenty of factors keeping this commodity busy, whether it’s the Fed's decision to reduce rates by 0.25%, expectations of a worsening trade war just as deputy level talks begin between the US and China today, geopolitical tensions and Saudi Arabia's attempt to recover its output, or EIA's result of a 1.1 million surplus following what were expectations of a small 2.1 million deficit. Geopolitical tensions have failed to subside, as regional rivalry picks up, and oil traders are waiting to see what will happen next, with any rumor/news/action enticing volatility breakout strategies over reversals. In terms of bias, retail traders are continuing to buy into the drop, with majority long sentiment up 3% to a heavy long 66%.
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