Gold fails to capitalize on central bank easing, oil plummets
US suspension of travel from Europe sends the energy commodity’s price dropping.
Gold Technical analysis, overview, strategies, and levels
With the Bank of England opting to cut interest rates by 0.5% in a surprise move and following last week's decisions by the central banks in the US, Canada and Australia to reduce their rates, the monetary mood remains in that of easing, and where fiscal easing is also expected to increase as well. Gold prices reached past yesterday's 1st Resistance level before retracing back down to break through its 1st Support level in a volatile session befitting its current technical overview. The surprise thus far has been gold prices failing to capitalize on clear global monetary easing, and whether that has to do with margin and position covering of losses in equities remains yet to be seen.
IG client* and CoT sentiment for Gold
That has been a test for both retail and larger speculative traders according to last Friday’s CoT (Commitment of Traders) report, the bias in the former rising a notch to a heavy long 74%.
Gold chart with retail and institutional sentiment
Silver Technical analysis, overview, strategies, and levels
As with gold, Silver prices were also in for a session in the red, though it’s been less of a surprise to see the precious metal’s price underperform given its usage on the industrial front is expected to drop due to the current coronavirus storm. The gold/silver ratio has risen this morning as equities plummet further, into the 98s. The price moves yesterday witnessed a break of its 1st Support level before retracing back up, only to break through again to fresh lows this morning in a volatile market.
IG client* and CoT sentiment for Silver
Silver chart with retail and institutional sentiment
Oil WTI Technical analysis, overview, strategies, and levels
Oil prices were in for increased volatility, but not necessarily due to yesterday's EIA (Energy Information Administration) release which showed oil inventories spike higher to 7.7mn with expectations prior for a 2mn surplus and closer to API's 6.4mn surplus the day before. That was due to the US suspension of travel from Europe, as well as reports circulating that Saudi Arabia was planning to increase its capacity to 13M barrels per day (bpd), beyond its plan to increase production for April to 12.3M bpd. Oil prices rose to briefly breach beyond yesterday’s 1st Resistance level before plummeting to below not just its 1st Support but 2nd Support as well. In more supply side news, geopolitical tensions are rising, which would be another wild card for the wild volatile moves in the energy commodity’s price.
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.
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