OPEC+ output cut agreement aids oil prices, gold and silver finish lower for the week

Gold Technical analysis, overview, strategies, and levels

Ongoing oscillation in weekly terms for gold's price, with gains made early last week undone with Friday’s better than expected Non-Farm Payrolls report that took the dollar higher, and aided a risk-on play in the financial markets where investors seek riskier assets such as equities and avoid safe haven assets like gold. Its technical overview on the weekly (and daily) remains consolidatory, and where its short-term support level is barely holding. This Wednesday's US central bank meeting will be important in terms of USD demand and overall risk appetite, ongoing US-China trade talk ought to be noted in the context of risk, and geopolitical tensions on the Korean Peninsula that could pick up as we approach the end of 2019.

IG client and CoT sentiment for Gold

As for sentiment, retail bias is little changed from last week and back up at extreme long levels at 79%, while the latest CoT (Commitment of Traders) report shows larger speculative traders reducing extreme long bias a notch on a reduction in gold long positions by 5,761 lots and a simultaneous rise in gold short positions by 2,168 lots.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

It was a tough week for silver, as the precious metal suffered a harsh drop at the end of the week against the US dollar, after failing to make gains made earlier in the week stick. As is the case with gold, there are conflicting technicals with its price below all its main weekly short-term moving averages (MA) while above all its main long-term weekly moving averages, and just above its 200-week MA. The breach in its short-term support level hasn’t helped extreme long retail traders, whose bias is unchanged since the start of last week at 92%. Also unchanged are CoT traders on hold at a heavy long 70%.

IG client and CoT sentiment for Silver

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

The focus last week was on OPEC and OPEC+ meetings, and the results were certainly in favor of higher oil prices as they agreed on a further 500,000 barrel per day reduction, with Saudi Arabia cutting more than its quota as it aids its Aramco IPO by attempting to set a floor on oil prices. A larger than expected EIA (Energy Information Administration) drawdown on Wednesday and another consecutive decline in Baker Hughes US oil rig count also helps the supply side, while any stability in global economic data or upside surprises would aid the demand side. The daily outlook remains a bull trend, while on the weekly its bull trend channel continues to hold.

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IG client and CoT sentiment for Oil WTI

Some of the biggest changes in retail sentiment have occurred in this energy commodity, shifting from an extreme long 77% at the start of last week to a majority short 60%. Meanwhile, CoT bias has dropped 3% but remains in extreme long territory.

Oil WTI chart with retail and institutional sentiment

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