Gold finishes the week higher, silver stalls, while oil drops again

Gold Technical analysis, overview, strategies, and levels

As far as gold prices go, the precious metal enjoyed a second consecutive week of gains as risk-related flows shifted focus from equities in retreat to safe haven products instead. That, combined with a US dollar that was in relative retreat in the FX market, aided gold prices in finishing slightly higher but failing to breach last week’s Weekly 1st Resistance level. With the movement relatively limiting, coronavirus fears will continue to determine where risk appetite will settle, with any worsening of the situation possibly aiding gold prices while denting oil prices instead.

IG client^* and CoT sentiment for Gold

On the sentiment front, retail bias remains heavily long but is down a notch from the start of last week on slight profit-taking, while larger speculative traders according to the latest CoT (Commitment of Traders) report have upped their extreme long bias and now stand at 89%.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

Last week's weekly 1st Support level was broken briefly but managed to hold by the end of the week as prices retraced back up, and keeping its daily overview a stalling bull trend while on the weekly consolidatory but with positive technical bias. Gold has continued to be the relative beneficiary over the mid-term, but any sizeable gold/silver gains have been prone to retracement keeping both precious metal cousins only slightly changed against each other.

IG client^* and CoT sentiment for Silver

Retail bias here is in extreme long territory rising to 91%, while CoT bias has dropped a couple notches to 71% on a reduction in silver long positions by 3,507 lots and an increase in silver short positions by 1,951 lots. For the remaining precious metals, platinum bias has risen to an extreme long 89%, while palladium’s has dropped to a heavy long 70%.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

Another week to forget for oil, with a gap lower and a finish lower as more negative technical bias forms with a negative DMI (Directional Movement Index) cross last week and showing signs of an initializing bear trend. However, the source of the movement is from fundamental factors affecting travel and expected future demand for the energy commodity, and hence technicals in this regard usually take a back seat. In data, Baker Hughes US oil rig count dropped by 1 to 675, while in the news we have yet to receive confirmation of an emergency meeting out of OPEC earlier than the planned March date.

Learn more about oil trading.

IG client^* and CoT sentiment for Oil WTI

Retail bias here has risen a couple percent to an extreme long 87%, while CoT bias that was at 88% has plummeted to 82% as although the bias is still extreme long, there’s been a clear unwinding of long positions and a simultaneous massive increase in oil short positions.

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%.

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