Gold retreats after making fresh highs, oil drops

Gold Technical analysis, overview, strategies, and levels

Gold prices were in for volatile movement yesterday and brief fresh highs before retracing back down to end the session lower. Neither of yesterday's key pivot points were reached, its price wildly oscillating between both levels and failing to offer a pivot point play. At what level households in need of liquidity will cash out remains yet to be seen, and in the financial markets equities in retreat on an IMF downgrade to economic projections and a rise in coronavirus cases hasn’t aided gold prices on being offset with a stronger dollar in the FX market. All its main technical indicators continue to flash green, but at some point if the negative effects of coronavirus persist, and necessary liquidation by some may become a reality, potentially putting downside pressure on the precious metal's price.

IG client^* and CoT sentiment for Gold

In sentiment, retail bias has jumped back into heavy long territory at 67%, and any downside move could take it to extreme buy levels.

Gold chart with retail and institutional sentiment

Oil Technical analysis, overview, strategies, and levels

Volatility finally picked up in the energy commodity as coronavirus cases rose and quarantine was imposed on visitors in some US states. The long-term effects to transportation have yet to be felt, and despite relatively bullish technicals in the short-term a pivot point break to the downside can't be ruled out. Conformist breakout strategies outperformed on a move well below yesterday's 1^st and 2^nd Support levels. In oil data, EIA's (Energy Information Administration) oil inventories estimate showed a 1.4m increase following expectations of a 1.2m surplus, and in turn was slightly lower when compared to API's (American Petroleum Institute) the night before. We get more US data released later today, though expect the announcement of any new measures or the postponement of easing that would dent travel and transportation to also potentially affect oil prices.

Learn more about oil trading.

IG client^* and CoT sentiment for Oil WTI

In sentiment, retail long bias has surged back to heavy long levels.

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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