Gold breaches $1,700, oil drops

Gold Technical analysis, overview, strategies, and levels

After gold prices plummeted to $1,450 last month testing long traders heavily who purchased followed the US Federal Reserve's (Fed) massive monetary stimulus, the precious metal finally recovered to breach the $1,700 level yesterday in a move that briefly went beyond its weekly 1^st Resistance level but failed (thus far) to offer much beyond it. It's only the start of the week, and any further weakening in the greenback and/or risk-off moves could aid gold prices in aiming to finish higher following three consecutive trading days of gains.

IG client^* and CoT sentiment for Gold

In sentiment, retail bias is still heavy to the long side, but has dropped slightly from 72% to 69%.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

While gold prices surged to breach the infamous $1,700 level, silver prices were stuck in relative oscillation with brief moves above the 15.6 level. Its technical overview on the weekly is volatile in the face of increased uncertainty, but the daily overview has shifted to a bull trend albeit stalling on the failure to offer much beyond the key daily pivot point on most days. In terms of the gold/silver spread, gold's outperformance has taken that spread slightly higher but failing to undo what has been a slow undoing of record highs made in the spread in mid-March.

IG client^* and CoT sentiment for Silver

Silver chart with retail and institutional sentiment

Oil Technical analysis, overview, strategies, and levels

Despite a record OPEC+ deal, oil prices finished the session lower, with plenty to worry about including a drop in demand that is greater than the output cut, as well as worries over how well the economy can recover even if talk is shifting towards when lockdowns will end. Any fresh updates on the energy front could take its price beyond its key pivot points, but should prices remain rangebound close to the lows and a technical overview shift could easily occur from volatile to one befitting its current negative viewing with most of its key technical indicators in the red and combined with a trending ADX (Average Directional Index).

Learn more about oil trading.

IG client^* and CoT sentiment for Oil WTI

In sentiment, retail bias is extreme long but has dropped a couple notch to 83%, hurt alongside institutional traders hoping for a move back up.

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.

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