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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.

Gold and silver rise as greenback takes a hit, oil lags despite deficit

Retreating dollar aids gold and silver in finishing higher, while API deficit fails to give oil prices a green finish.

Gold Source: Bloomberg

GOLD: Finishing higher against a battered greenback as rate cut likelihoods rise

Retail longs were in for some relief following retracement off the lows that was initiated based on fundamental factors with the catalyst being that US manufacturing has joined other global manufacturing sectors in contracting – and heavily for that matter. With manufacturing in recession, rate cut likelihoods rising (and with the Reserve Bank of Australia reducing rates by 0.25% and willing to increase easing if needed), global recessionary risks failing to subside, and the US president wanting a weaker dollar, the precious safe haven metal might have a leg to stand on. Retail bias stands now at 67% and down 3%, but with a significant portion of those of those longs initiated at higher prices, more will be needed to unwind those positions in profit.

Gold Source: IG charts
Gold Source: IG charts

SILVER: Enjoying a stronger finish but unable to recover Monday’s losses

While the pair’s price enjoyed a stronger finish (as was the case with gold) with the greenback in retreat and rate cut likelihoods out of the US Federal Reserve rising, it hasn’t been able to shrug off short-term negative technical bias (even if its weekly outlook is more bullish). Retail bias here however has risen, and stands at a staggering extreme long 88%.

Silver Source: IG charts
Silver Source: IG charts

OIL – US CRUDE: Dented demand and supply woes keep the energy commodity relatively rangebound

There continues to be conflicting factors keeping the energy commodity’s price in a bit of a tussle, as clear recessionary risks continue to dent its price but supply worries giving it a bit of a leg to stand on, with the latest estimate out of American Petroleum Institute (API) showing a significant 5.92M deficit and ahead of the Energy Information Agency’s (EIA) more encompassing estimate this evening set to show a 2M surplus this evening. Retail bias is still extreme long at 82% but down a couple notches, and with both retail and institutional traders holding extreme long bias.

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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