Gold briefly tops $1,700, oil crashes

Gold Technical analysis, overview, strategies, and levels

It was another volatile week for gold prices, more than aiding conformist breakout strategies as central bank decisions of interest rate cuts combined with further easing expectations and a plummet in yields on coronavirus fears aiding the non-yielding precious metal in finishing higher and undoing the week before’s losses. Large moves in either direction will likely continue to test key pivot points.

IG client^* and CoT sentiment for Gold

As for sentiment, retail long bias has dropped from an extreme long 77% to a heavy long 67% as longs get enticed into taking profit, and the latest figures from the CoT (Commitment of Traders) report shows larger speculative traders reducing long positions by 23,166 lots and shorts by 7,034, and in percentage terms taking extreme long bias a notch higher to 89%.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

Silver prices while finishing higher failed to outperform compared to gold, and failed to undo the losses suffered the week before despite weakness in the US dollar. The gold/silver ratio marched higher towards 99, while silver prices briefly broke below both its 200-week and 50-week moving averages, the two on the verge of crossing each other as seen on the weekly price chart. Overall, conformist volatility strategies outperformed as its price went past last week’s Weekly 1^st Resistance level.

IG client^* and CoT sentiment for Silver

In sentiment, retail bias remains in extreme long territory and unchanged since the start of last week at 93%, while CoT bias has dropped by 6% to a heavy long 71% on a reduction in long positions by 24,920 lots and an increase in shorts by 1,570 lots.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

It was already a tough atmosphere for oil prices with the current coronavirus storm hitting demand, which then went from bad to worse as OPEC+ failed to agree to a reduction in output, with Russia going further to say that it may increase April’s output once the current agreement ends in a few weeks. That sent oil prices plummeting over 10% on Friday alone, and aiding its weekly (and daily) volatile technical overview that has seen conformist breakout strategies outperform. With Saudi Arabia slashing prices, any further updates could keep the energy commodity volatile.

Learn more about oil trading.

IG client^* and CoT sentiment for Oil WTI

In sentiment, retail bias has risen further into extreme long territory now standing at 86%, the bulk of those longs initiated above current market price. As for larger speculative traders according to the latest CoT report, their long bias (in light sweet crude oil on the New York Mercantile Exchange) has dropped by 5% to a heavy long 76% on an increase in short positions by 48,203 lots outdoing a smaller increase in long positions by 5,106 lots.

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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