Gold and silver surge as Fed introduces unlimited QE
Oil manages to cover weekend gap, retail long bias drops in all three
Gold Technical analysis, overview, strategies, and levels
It was a big day for gold, registering significant gains no doubt thanks to weakness in the US dollar on the back of unlimited quantitative easing out of the US Federal Reserve (amongst other programs that were introduced), and taking its price well past its Weekly 1st and 2nd Resistance levels that were breached in one day and aiding conformist breakout strategies. Further fiscal stimulus may also be on the way out of the US, even if the Senate failed twice to pass a $2tn package. The gains here have taken its price back above both its 200-day and 100-day moving averages, though with fundamental news and uncertainty causing big shifts in the financial markets, the overview has remained volatile.
IG client* and CoT sentiment for Gold
The price moves have aided retail long traders heavily squeezed by the move into the $1450s last week, and long profit-taking has helped take yesterday’s 83% extreme long bias down to 79%.
Gold chart with retail and institutional sentiment
Silver Technical analysis, overview, strategies, and levels
As with gold, yesterday’s price moves took silver prices breaching its Weekly resistance levels with ease, and in turn aiding conformist breakout strategies here as well. Silver this time around was the outperformer, and in turn the gold/silver spread has dropped for a third consecutive session from its peak last Wednesday in the 126s down to the 116s as of the writing of this report.
IG client* and CoT sentiment for Silver
In sentiment, while retail long sentiment has dropped, it has been only by 2% with the bias remaining in extreme long territory at 93%, and where the bulk of those longs have been initiated at far higher prices and in need of far greater upside movement to unwind.
Silver chart with retail and institutional sentiment
Oil WTI Technical analysis, overview, strategies, and levels
Oil prices managed to fill the weekend gap lower and as of this morning have climbed slightly, reaching close to today’s 1st Resistance level. Overall however, and despite central bank easing combined with fiscal stimulus, it can’t do much to create demand for an energy commodity that is currently unwanted due to the coronavirus lockdown which has spread to encompass more countries. In terms of oil data, we get API’s (American Petroleum Institute) reading regarding US weekly crude oil stocks this evening, and while it showed a slight deficit last week, it’s unlikely to avoid showing significant surplus in the weeks to come as inventories globally build.
IG client* and CoT sentiment for Oil WTI
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.
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