Daily Market Report: Gold, Silver, & US Oil
Silver outperforms as gold’s price stalls near the highs, energy prices remain bid on geopolitical tensions.
GOLD: USD strength prevents the precious metal from rising despite an uptick in geopolitical tensions
There are multiple factors at stake for this pair, as gold’s price tends to outperform when investors flee to safe haven products. In the current scenario, equities are still rising (albeit slightly) which usually dents appetite for gold, but given the catalyst is expected easing, non-yielding assets like gold that may be viewed as a hedge against inflation tend to be more worthy. The final two factors are geopolitical tensions failing to subside, and the US dollar in which this pair is priced. It’s a tussle between all these factors and so far the pair’s bull trend is still intact but stalling heavily at the highs and with its ADX no longer showing a propensity to trend, an early sign that a struggle at current heights may be the new norm, and test both retail and institutional longs who hold heavy to extreme buy bias in the precious metal.
SILVER: Initializing bull trend technical overview at risk of shifting if USD weakness doesn’t persist
Although the greenback strengthened yesterday to upset most USD denominated pairs, silver’s price wasn’t one of them opting instead for a green finish in line with its current initializing bull trend technical overview where the bulk of its technical indicators are flashing green, but with a non-trending ADX a key worry over whether the trend has more room to run. Furthermore, USD strength this morning is already testing its bull trend that has only just started to form, with the pair’s price close to its 1st Support level as of this morning. Retail long bias has dropped again, but remains at extreme long levels of 86% and far above the more modest majority long bias held by institutional traders.
OIL – US CRUDE: Geopolitical tensions keep energy prices bid, but USD strength contains the gains
With geopolitical tensions failing to subside on oil’s supply side, energy prices ought to be higher. However, demand side worries persist with central banks emphasizing risks to global growth, and instead putting easing back on the table as an option to stimulate demand. Furthermore, it’ll also depend on whether the US dollar can avoid rebounding. As it stands however, although the pair’s price is below all its main daily moving averages combined with a trending ADX, the closely huddled technical indicators makes future movement more difficult to predict with technical signals produced more easily given their proximity to each other and the pair’s price.
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