Oil plummets as more enter lockdown, gold oscillates
Markets expected to be volatile this week given fundamental events, CoT bias extreme buy for both oil and gold.
Gold Technical analysis, overview, strategies, and levels
Volatility has started to rise for gold prices, testing short-term levels with ease and aiding breakout strategies on both Daily and Weekly levels last week. US yields have been rising, the greenback strengthening at times when the 'sell everything' mood prevails, and equities have been in some retreat which under normal circumstances would be positive for safe haven, but when used as a hedge would make the movement more correlated. Its technical triangle on the Daily broke at last offering another bout of volatility, and big fundamental events this week are likely to keep prices volatile. A retreat in gold prices has meant silver underperformed, the gold/silver ratio briefly making it into the 80s.
IG client* and CoT** sentiment for Gold
As for sentiment, retail bias is still extreme buy and up a notch since the start of last week, while CoT speculators have repositioned by reducing both short and long positions by over 10K lots each, failing to take sentiment out of extreme buy territory.
Gold chart with retail and institutional sentiment
Oil WTI Technical analysis, overview, strategies, and levels
The increased volatility in oil prices meant Daily conformist breakout strategies were outperforming last week, with a break in its Weekly 1st Support level as lockdown news and increased restrictions took its toll on the energy commodity. Earnings from energy giants showed ExxonMobil and Chevron reduce spending, the latter managing to post a small profit and the former preserving its dividend despite a third consecutive quarter of losses. Shell raised dividends as profit beat expectations, and BP announced a dividend for the quarter. In oil data, Baker Hughes oil rig count showed another increase, to 221 from 211, a theme unlikely to persist if we continue to experience falling oil prices. The overview while usually consolidatory for the Weekly could experience more volatility given policy differences ahead of the elections, as well as rising coronavirus cases.
IG client* and CoT** sentiment for Oil WTI
Both retail and CoT traders holding majority buy bias, the latter still at extreme levels.
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 for the outer circle. Inner circle is from the previous trading day.
**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
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.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
React to volatility on commodity markets
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
See opportunity on a commodity?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a commodity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Analyse and deal seamlessly on fast, intuitive charts
- Get spreads from just 0.3 points on Spot Gold
- See and react to breaking news in-platform
See opportunity on a commodity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
