Gold and silver finish the week higher, last weekend’s oil gap still holding
0.25% Federal Reserve rate cut aids non-yielding assets while geopolitical tensions keeps last weekend’s oil gap still holding.

GOLD: Finishing higher against the greenback following the US Federal Reserve’s 0.25% rate cut and rising geopolitical tensions
The pair’s price has managed to rise off the short-term support level at the end of last week, after finishing lower on Wednesday night despite the Fed’s 0.25% rate cut that ideally should have given non-yielding assets like the precious metal another leg to stand on. On the geopolitical front however, safe haven continues to remain relatively bid, especially as global demand woes fail to subside. Commitment of Traders (CoT) bias has risen a notch to an extreme long 85% thanks to an increase in gold longs by 7,397 lots and a simultaneous reduction in shorts by 5,477 lots. On the retail front, the bias has dropped by 6% on long profit-taking late last week but remains in heavy long territory and anticipating further gains.

SILVER: Relatively range-bound movement as its bear trend stalls at current levels
On the daily outlook, most of the technical indicators are neutral but with its price above its main long-term moving averages and its Average Directional Index (ADX) showing an ongoing propensity to trend. Looking at the weekly outlook and most of its indicators remain bullish despite two weeks of retracement, and with last week’s higher finish in this pair’s price occurring even as the greenback relatively outperformed in the FX market. Institutional bias is unchanged at a heavy short 71% with silver longs down by 5,788 lots and shorts down by a smaller 1,535 lots, while retail bias continues to inch further into extreme long territory at 87%.

OIL – US CRUDE: The most watched commodity last week, set to remain the same this week
With the geopolitical front remaining tense in the Middle East, volatility may return to the pair’s price after a tumultuous start last week with the weekend gap higher. From a technical standpoint – and they are far less relevant in the face of any significant supply side shocks – most of the indicators on both the weekly and daily are neutral, and with a non-trending ADX on the weekly. Retail and institutional longs were the beneficiaries with the upside movement, the former’s heavy long bias down 6% on profit-taking and the latter’s extreme long 84% bias unchanged following small and insignificant increase in both long and short positioning, to the tune of 2,958 and 3,878 lots respectively. Friday night’s Baker Hughes US oil rig count showed another drop, this time a significant one with the figure dropping to 719 from 733 prior.

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