Greenback weakness takes precious metals higher, oil stalls at the highs

Gold Technical analysis, overview, strategies, and levels

It's been a constant question of whether gold prices will be able to breach its current mid-term resistance level and hold, as a part of the recent gains witnessed in the precious metal have been down to USD weakness, which in turn underperformed again in the FX market against the FX majors. While the weekly outlook is consolidatory but showing strong positive bias, the daily outlook is showing an initializing bull trend whereby all its main technical indicators are flashing green. However, just as the gains were swift, they are also easily at risk of being undone should the US dollar regain its footing. Until then, the increase in geopolitical tensions and indices failing to make higher highs has the capacity to entice those into buying at these levels and the lack of liquidity easily causing pivot points to break.

IG client and CoT sentiment for Gold

In sentiment, retail bias remains in heavy long territories rising slightly to 67%, while the latest CoT (Commitment of Traders) figures for larger speculative traders show extreme long bias of 86% with long positions increasing by 19,817 lots and a small increase of 440 lots in short positions.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

After outperforming against gold for much of last week, the gold/silver spread was in for another drop. However, putting aside the difference in performance, relative against a battered greenback both have been registering gains with the technical overview bullish and its main technical indicators flashing green. The same risks in gold appear for silver however, and that’ll depend on US dollar appetite moving forward once liquidity returns in larger levels after the holidays.

IG client and CoT sentiment for Silver

In sentiment, retail bias is unchanged at an extreme long 89%, while CoT bias has risen by 4% to a heavy long 72% on an increase in silver long positions by 12,815 lots and a simultaneous reduction in silver short positions by 3,826 lots.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

The news thus far has largely been in favor of higher oil prices, with geopolitical tensions rising in the Middle East, and risks of OPEC+ being undone in 2020 as comments from Russia's Energy Minister point to a possible withdrawal. However, the net result for the energy commodity's price yesterday was a brief higher high that was followed by a reversal and a slightly lower finish, and ahead of API's (American Petroleum Institute) estimate for US oil inventories following last week's large drawdown that wasn't far off EIA's (Energy Information Administration) estimate last Friday. Given Wednesday's a holiday, we can expect EIA's release this Friday instead.

Learn more about oil trading.

IG client and CoT sentiment for Oil WTI

As for sentiment, retail bias has inched higher to a heavy short 70%, while institutional bias is unchanged at extreme long levels at 89% despite an increase in long positions by 13,189 lots and a small insignificant reduction in short positions.

Oil WTI chart with retail and institutional sentiment

Be sure to request IG’s Weekly & Daily Market Report when you open an account with IG Dubai and get access to the full information on the FX majors, commodities, indices, and Bitcoin.