Oil’s June contract settles tomorrow, unlikely to go negative again

Gold Technical analysis, overview, strategies, and levels

After struggling to find momentum earlier last week, gold prices were in for four days of consecutive gains which aided Weekly conformist buy breakout strategies as well as Daily buy breakouts at the end of the week, keeping the precious metal's bull trend technical overview intact that had been stalling heavily at these levels attempting to breach its key short-term resistance level. This was despite an outperforming US dollar, and equities that weren't under pressure towards the end of the week. Attempts to push more fiscal policy packages through will translate into more easing out of the central bank to purchase bonds issued to finance that debt, which means traders will only need to contend with the short-term price action.

IG client^* and CoT sentiment for Gold

Larger speculative traders according to the latest CoT (Commitment of Traders) report have reduced their extreme long bias on an increase in shorts by 9,376 lots outdoing an increase in longs by 2,200 lots.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

It's been mentioned here before that gold and silver rarely have differing technical overviews for long, with a shift on the Daily to an initializing bull trend following Friday's price surge. On the Weekly, most of its main technical indicators are still neutral, but we got its price crossing above its 100-week and 200-week moving averages (MA), with its price closing just below its 50-week MA. With silver outperforming against gold, the gold/silver ratio has been coming back down, a trend which if persists would mean silver would be the outperforming precious metal as the short squeeze on spread traders unwinds.

IG client^* and CoT sentiment for Silver

As for trader bias, retail traders remain in extreme long territories and little changed since the start of last week, while CoT speculator bias has risen to a heavy long 70% on a reduction in shorts by 2,153 lots and a simultaneous increase in silver long positions by 705 lots.

Silver chart with retail and institutional sentiment

Oil Technical analysis, overview, strategies, and levels

After oscillating to the upside at the start of the week, oil prices finally lived up to its volatile technical overview aiding breakout opportunities on the Weekly by breaching both 1^st and 2^nd Resistance levels last week, as well as the Daily levels on Thursday and Friday. Lockdown restrictions are easing especially on the domestic travel front, and in oil data the latest out of Baker Hughes showed a drop in US active oil rig counts to 258 from 292 the week before. Volatility could continue this week with the expiration of the June contract, even if it's highly unlikely it'll go negative again.

Learn more about oil trading.

IG client^* and CoT sentiment for Oil WTI

In sentiment, retail bias has shifted at last to majority short for the first time since the January geopolitical shock, while larger speculators have increased their long bias to take it to an extreme 81% on a larger reduction in shorts (by 23,762 lots) than longs (by 13,355 lots).

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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