Gold rises on increased risk aversion, oil’s weekend gap gets filled
CoT bias for precious metals and oil remains in heavy to extreme long territory
Gold Technical analysis, overview, strategies, and levels
The strength in both indices and the US dollar failed to dent the shiny metal last week, opting instead to recover most of last week's losses. As for this morning, the increased risk aversion in the financial markets following the virus in China and ongoing geopolitical risks has sent gold's price towards today’s 1st Resistance level. Most of its main technical indicators continue to flash green, but contrarian vs. conformist strategies may have more to do with whether (or when) pivot points may break.
IG client and CoT sentiment for Gold
CoT (Commitment of Traders) bias amongst larger speculative traders remains in extreme long territory, even if there's been an insignificant drop in long and short positions to the tune of 6,671 and 3,615 lots respectively.
Gold chart with retail and institutional sentiment
Silver Technical analysis, overview, strategies, and levels
Both gold and silver weren't in for a reversal last week even as the US dollar outperformed in the FX market. However, they couldn't match the performance of palladium nor platinum, with both registering strong gains last week and the former's overview shifting to volatile. While the overview is relatively bullish, for this precious metal it’ll matter more how the US dollar fares in the FX market, and hence even with a risk averse environment its main pivot points could still hold and entice a contrarian reversal.
IG client and CoT sentiment for Silver
CoT bias here is unchanged at a heavy long 72% with both long and short positions rising by about 1,500 lots each, while for palladium the bias has dropped to a heavy long 76% and for platinum remains in extreme long territory at 86%.
Silver chart with retail and institutional sentiment
Oil WTI Technical analysis, overview, strategies, and levels
Oil prices gapped higher yesterday following increased geopolitical risks in Libya (as well in Iraq), but that gap has gotten filled as its price retraces back down as investors shun riskier assets this morning. All its main technical indicators on the daily are neutral save for its ADX (Average Directional Index) which is showing an ongoing propensity to trend, though awaiting fresh announcements on the geopolitical and global growth scene continue to play a larger role in determining if its key pivot points will hold or break. Friday's Baker Hughes US oil rig count showed a slight recovery off the lows from 659 to 673, and as for API's (American Petroleum Institute) inventory estimate, it'll be released tomorrow night instead given yesterday was a US bank holiday.
IG client and CoT sentiment for Oil WTI
In sentiment, institutional bias remains in extreme long territory but has dropped a couple notches to 88%.
Oil WTI chart with retail and institutional sentiment
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