Gold and silver suffer slight retracement, oil price gains limited by API surplus

Gold Technical analysis, overview, strategies, and levels

After suffering early in the session yesterday, risk appetite improved in equities, and given its priced in dollars where the greenback settles matters here. The US dollar was a relative underperformer in the FX market, but the safe haven yen took a bigger hit as the slowdown in the number of new cases reported on the coronavirus front and US Federal Reserve (Fed) Chair Powell’s testimony of an economy in a good place kept safe haven in check for products like bonds and gold, taking yields slightly higher for the session. Although its ADX (Average Directional Index) is showing a propensity to trend combined with its price still above all its main long-term moving averages and a positive DMI (Directional Movement Index), risk-related moves continue to determine whether pivot points will break and entice conformist breakout strategies, or hold and aid contrarian strategies instead.

IG client^* and CoT sentiment for Gold

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

Silver was a relative underperformer compared to gold taking the gold/silver ratio slightly higher, but as with gold it too suffered and finished the session slightly lower but where yesterday’s 1st Support level managed to hold. Its price is just above both its 50 and 100-day moving averages, which are in turn closely huddled to each other having crossed paths a few days ago. A cross and finish below it would increase negative technical bias, and combined with a trending ADX.

IG client^* and CoT sentiment for Silver

In the meantime both retail and institutional traders await upside movement given they are both holding heavy to extreme long bias in the precious metal.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

In the absence of any fundamental news, oil prices have been at the mercy of expectations with regards to Chinese demand. And with equities rising to finish the session higher and fresh record highs for some indices, that has translated into a bit of relief for oil prices that have managed to rise somewhat off the lows. As for API's (American Petroleum Institute) latest oil inventories figure, it showed a significant 6M surplus following a 4.2M surplus last time around, and this evening's EIA (Energy Information Administration) figure is expected to show a more moderate 3.1M increase. While API’s surplus limited oil price gains, this morning’s session has seen its price recover lost ground.

Learn more about oil trading.

IG client^* and CoT sentiment for Oil WTI

Retail bias remains extreme long rising a notch to 88%.

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.

Be sure to request IG’s Weekly & Daily Market Report when you open an account with IG Dubai and get access to the full information on the FX majors, commodities, indices, and Bitcoin.