Oil prices edge higher following weekend OPEC+ deal

Gold Technical analysis, overview, strategies, and levels

Although gold's Weekly 1^st Support level held intraweek to offer plenty of gains, Friday's surprise Non-Farm Payrolls report out of the US took risk appetite to fresh heights and hurt safe haven assets considerably. The net result for gold prices was a breach below its 1^st Support level with ease, and aid short-term sell breakout strategies conforming to its technical overview shift of increased volatility. We've got the US Federal Reserve's (Fed) monetary policy decision this Wednesday, as well as any further risk-on moves in the financial markets likely to test the precious metal's price.

IG client^* and CoT sentiment for Gold

Retail bias is in extreme long levels at the start of the week, and while CoT (Commitment of Traders) speculators are holding a stronger extreme buy bias, it has been dropping thanks to a reduction in longs by 15,952 lots and a simultaneous rise in shorts by 2,928 lots.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

Silver prices stayed within last week's Weekly pivot points, but on the Daily broke below its 1^st Support level on Friday as most precious metals were in retreat. The gold/silver ratio finished slightly lower for the week in what has been five consecutive weeks of decline. With big risk-related moves in the financial markets, the US dollar in focus, and the Fed's Wednesday meeting, contrarian strategies can't be ruled out in the face of fundamental shifts.

IG client^* and CoT sentiment for Silver

Retail traders continue to hold an extreme level bias and are up a notch at 88% since the start of last week. Larger speculators have increased both silver long and short positions by more than 3,400 lots, and in percentage terms the long bias has dropped to 70%.

Silver chart with retail and institutional sentiment

Oil Technical analysis, overview, strategies, and levels

It’s been a busy weekend for the energy commodity, with Saturday’s OPEC+ deal resulting in an extension in the current record 9.7m bpd (barrel per day) cut until the end of July, the absence of which would have resulted in a drop to 7.7m bpd from July. Oil prices had already been surging prior to the weekend deal as economies reopen, buoyed by a risk-on atmosphere in the financial markets as well as a weaker US dollar in the FX market. However, with most US shale producers holding production costs higher than Friday's close, hedging at these levels won't be enticing.

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IG client^* and CoT sentiment for Oil WTI

In sentiment, retail bias has jumped into heavy long territory anticipating further price gains, reaching 72% intraweek before dropping to 66% following Friday’s surge that enticed fresh longs initiated earlier in the week into swiftly closing out in profit. Larger speculative traders according to the latest CoT report continue to hold an extreme long bias of 82%.

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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