Gold surges on RBNZ easing and geopolitical tensions, oil lags
Fresh highs for gold and silver this morning, but Brent’s bear market weighs on energy.
GOLD: Another fresh high with further gains this morning
Another week, another central bank rate cut. This time around it was the RBNZ’s larger than expected 0.5% rate cut and its Governor Orr’s talk of negative interest rates. More and more confirmation of central bank easing is positive for non-yielding assets, and the (further) rise in geopolitical tensions certainly won’t hurt gold’s bottom line. All its technical indicators are bullish and showing an ongoing propensity to trend, aiding its current technical overview of a bull trend on both the daily and weekly charts. Retail and institutional traders have been positioning themselves for gains, with both majority long and retaining that bias.
SILVER: Fresh highs this morning alongside its precious metal cousin
While the outlook for gold is far brighter, silver has managed to breach its short-term resistance level as of this morning and keep its bull trend technical overview intact, whereby nearly all its main indicators are flashing green, and combined with a trending ADX. That’s good news for retail traders holding an extreme long 91% bias, as well as institutional traders at a heavy long 70% and upping that bias significantly on a sizeable reduction of silver shorts as per the latest CoT report.
OIL – US CRUDE: Negative technical bias persists as its price closes 20% lower from its April peak
The tussle continues between demand and supply side factors for the energy commodity. On the demand side, a worsening trade war is causing demand for oil to plummet, and with the mid to long-term outlook for growth disappointing combined with heavier competition from an energy and transportation grid looking to diversify away from oil-based consumption will certainly preventing energy prices from going bid. On the supply side however, it’s mixed news: geopolitical tensions have failed to subside both in the Middle East and in Latin America with the recent US asset freeze and sanctions on oil producer Venezuela, as well as US inventories declining following yesterday’s successive API deficit, this time to the tune of 3.4M. The wild card on the supply front is China, which given the trade war could opt to import Iranian oil again (or is already doing so), and in the process would mean previously sanctioned oil would now flood the system.
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