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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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

Retail sentiment shifts in oil to majority short, gold and silver bias still in extreme long territory.

Oil Source: Bloomberg

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.

Learn more about oil trading.

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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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.

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