Risk-off fails to give gold and silver significant gains, retail longs book profit on oil
Oil’s gap higher gives long retail traders a chance to take big profits, silver and gold gap higher but fail to outperform.
GOLD: Risk-off gives the precious metal a gap higher, though it too failed to best the dollar
Given increased geopolitical tensions, expectations were for the pair’s price to not just gap higher but to finish higher as well. However, a key item to keep in mind is that with higher energy prices, central bank inflation targets are likelier to be reached, and as a result rate cut likelihoods are dropping, with this Wednesday’s FOMC expected to reduce rates by 0.25% but only 64% majority priced in. As it stands, the pair’s price is close to its short-term support level that has managed to hold, and with its long-term weekly outlook still a stalling bull trend. The gap higher did aid fresh retail longs slightly, closing out and taking heavy long bias 2% lower to 71%.
SILVER: Conflicting short-term technicals continue to mask future direction
With most of its technical indicators neutral and price below all its main short-term moving averages but above all its main long-term ones, the pair’s technical overview is more difficult to predict, especially as short-term retracement brushes up against long-term bullish technicals on the weekly that was released yesterday showing a more bullish outlook on the weekly chart. As with gold, the pair’s price gapped higher. But unlike its precious metal cousin, it managed to hold onto those gains for a higher finish. FOMC will keep the US dollar volatile, and hence breakout strategies may be more ideal for the event tomorrow evening.
OIL – US CRUDE: Oil finishes heavily in the green in a volatile session for energy
It was a big day for oil yesterday and looks set to remain that way as tensions fail to subside with accusations on both sides keeping the market from retracement back lower as investors seek clarity on what future course the region may take. Volatility was the key word, but ending in the green it was a big boon for retail traders who took profit on longs and sent retail bias dropping 22% from a heavy long 73% to a slight majority long 51%. Any further price increases at this stage may prevent range-trading shorts from entering, especially if they assume ongoing price increases. From a technical standpoint, its price crossed above all its main moving averages, a positive DMI cross occurred, but still isn’t showing a trending ADX due to months of oscillations prior.
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