Gold prices recover, oil oscillates near its highs

Gold Technical analysis, overview, strategies, and levels

A week of partial retracement for gold prices, but where the short-term is still relatively more bearish. A greenback in retreat certainly helps, as does expectations of increased stimulus out of the US government. Two downside factors though are rising yields and expectations of eventual economic recovery, and hence more importantly on the ETF front whether the outflows will gather pace as investors seek to partially hedge elsewhere. The technical overview remains conflicting, and where added unknown factors can take its price out of its key levels.

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

Meanwhile, CoT speculators are upping their extreme buy bias, with a drop in shorts by 12,392 lots and a rise in longs by 4,020 lots taking it to 84% (heavy long 73%, 75%, and 68% for silver, platinum, and palladium respectively). Retail traders are also holding extreme buy bias but have dropped since the start of last week from 83% to 81%.

Gold chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

It's been an eventful week for oil prices, the net result a finish higher and an OPEC+ agreement that will increase output by only 500K instead of the original plan earlier this year of reducing its output cuts from 7.7m to 6m. They could easily recommend another 500K increase when its ministers meet next year, and try to prevent shale producers from recovering and snatching market share. In oil data, Baker Hughes oil rig count for the US showed an increase from 241 to 246, with any further price increases tempting producers into locking in higher prices and restarting production, especially if there's light at the end of the tunnel should the vaccines prove effective. Until then, rising coronavirus cases and lockdowns, as well as further vaccine updates are items the energy commodity's price will have to contend with.

Learn more about oil trading.

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

CoT speculators still hold extreme buy bias little changed from the week before, while retail bias is near the middle.

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 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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