CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Oil plummets on API surplus, partially recovers this morning

Spot gold prices dropped during the session, silver relatively outperformed again.

Gold Technical analysis, overview, strategies, and levels

Unlike equities (and some FX majors) where prices were breaking key pivot points, spot gold prices were relatively sedate in comparison to future prices and remained rangebound failing to offer conformist nor contrarian strategies a play on a lack of pivot point action. Equities were initially surging which usually translates into weakness for the safe haven metal, but the US dollar was also in decline and it's likelier than not that even with a price decline in precious metals, investors will be more keen to keep a greater percentage in something more tangible and non-fiat. The US Federal Open Market Committee's (FOMC) minutes will be released this evening, of importance to any USD-denominated metal.

IG client* and CoT sentiment for Gold

The lack of significant change here has meant that retail bias is unchanged at a heavy long 75%.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

As with gold, silver prices failed to reach beyond its key pivot points, and in turn not offering contrarian or conformist strategies a play. When buy-everything moments occur the likes of which were partially witnessed yesterday in equities, it usually translates into silver outperforming against gold prices similar to what we saw on Monday. The gold/silver ratio dropped back down briefly into the 107s as silver outperformed compared to spot gold before partially recovering.

IG client* and CoT sentiment for Silver

In sentiment, retail traders upped their bias on Monday to 93% anticipating further price gains, but those fresh longs have been quicker to take profit, and in turn taking the bias slightly lower to a (still) extreme long 91% when prices moved briefly higher in yesterday’s session.

Silver chart with retail and institutional sentiment

Oil Technical analysis, overview, strategies, and levels

We're approaching closer and closer to the big event for oil prices, with 'OPEC+ and Friends' set for a virtual meeting tomorrow (and another call between G20 energy ministers scheduled for Friday), and any rumors prior of a deal likely to make oil prices more volatile, the absence of which keeping the energy commodity relatively rangebound only briefly breaking through yesterday's 1st Support level following a massive 11.9m surplus from API's (American Petroleum Institute) oil inventories estimate. EIA's (Energy Information Administration) more encompassing estimate is up next expected to show a similar 9.8m increase, though for now oil prices are recovering this morning.

Learn more about oil trading.

IG client* and CoT sentiment for Oil WTI

In sentiment, retail long bias rose yesterday back to extreme long levels at 77%, and has since increased further to 80% as fresh shorts get enticed into closing out following yesterday's drop.

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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