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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.

Daily Market Report: Gold, Silver, Oil

Silver outperforms as gold’s price lags at the highs

GOLD Source: Bloomberg

GOLD: Stalling at the highs as Monday’s flows were relatively sedate

Expectations weren’t high to begin with yesterday, given the lack of data and investor attention on this week’s retail data and earnings release. Both will be important today in determining risk appetite and future Fed easing expectations, and as a result gold’s non-yielding attribute and greenback strength will be in play as financial earnings from the US set the tone in terms of risk. From a technical standpoint, it’s a bull trend that’s stalling at the highs, and where its bull trend line on the daily chart is still holding thus far. Retail bias is still heavy long at 67% after dropping a notch, while institutional bias is at extreme long levels.

GOLD Source: IG charts
GOLD Source: IG charts

SILVER: Positive technical bias as more technical indicators flash green

We’re accustomed to seeing silver’s price underperform compared to gold’s, so yesterday’s increase was a slight relief for extreme long retail traders holding a 94% long bias, dropping a notch on slight long profit-taking. However, the bulk of those longs have been initiated at far higher price levels, and far more gains will be needed before significant profit-taking can occur. From a technical standpoint, it’s still relatively consolidatory but its price is above all its main moving averages and piercing the upper extremes of the band. Most of its technical indicators are huddled close to each other, and hence crosses occur more frequently making it a more difficult pair to predict.

SILVER Source: IG charts
SILVER Source: IG charts

OIL – US CRUDE: Bull trend gets tested ahead of API’s release tonight

Although geopolitical tensions have yet to subside, energy prices retraced off the highs yesterday and is already testing the recent technical overview change to an initializing bull trend whereby most of its indicators are flashing green, but a non-trending ADX and a greenback that thus far hasn’t weakened further. API’s estimate is tonight, and while it isn’t as encompassing as that of EIA’s estimate tomorrow, last week’s figure was quite similar to EIA’s 9.5M deficit that sent energy prices higher. US data and earnings will determine the demand side, while deficits and geopolitical tensions will dictate the supply side. Meanwhile, retail bias has increased 3% as fresh averaged-in shorts close out while longs ponder over whether to hold on anticipating further gains.

OIL Source: IG charts
OIL Source: IG charts

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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