CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Gold fails to capitalize on central bank easing, oil plummets

US suspension of travel from Europe sends the energy commodity’s price dropping.

Gold Technical analysis, overview, strategies, and levels

With the Bank of England opting to cut interest rates by 0.5% in a surprise move and following last week's decisions by the central banks in the US, Canada and Australia to reduce their rates, the monetary mood remains in that of easing, and where fiscal easing is also expected to increase as well. Gold prices reached past yesterday's 1st Resistance level before retracing back down to break through its 1st Support level in a volatile session befitting its current technical overview. The surprise thus far has been gold prices failing to capitalize on clear global monetary easing, and whether that has to do with margin and position covering of losses in equities remains yet to be seen.

IG client* and CoT sentiment for Gold

That has been a test for both retail and larger speculative traders according to last Friday’s CoT (Commitment of Traders) report, the bias in the former rising a notch to a heavy long 74%.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

As with gold, Silver prices were also in for a session in the red, though it’s been less of a surprise to see the precious metal’s price underperform given its usage on the industrial front is expected to drop due to the current coronavirus storm. The gold/silver ratio has risen this morning as equities plummet further, into the 98s. The price moves yesterday witnessed a break of its 1st Support level before retracing back up, only to break through again to fresh lows this morning in a volatile market.

IG client* and CoT sentiment for Silver

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

Oil prices were in for increased volatility, but not necessarily due to yesterday's EIA (Energy Information Administration) release which showed oil inventories spike higher to 7.7mn with expectations prior for a 2mn surplus and closer to API's 6.4mn surplus the day before. That was due to the US suspension of travel from Europe, as well as reports circulating that Saudi Arabia was planning to increase its capacity to 13M barrels per day (bpd), beyond its plan to increase production for April to 12.3M bpd. Oil prices rose to briefly breach beyond yesterday’s 1st Resistance level before plummeting to below not just its 1st Support but 2nd Support as well. In more supply side news, geopolitical tensions are rising, which would be another wild card for the wild volatile moves in the energy commodity’s price.

Learn more about oil trading.

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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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.

Be ready to act on Bank of England announcements

Take a closer look at the potential effects of the BoE’s interest rate announcement, ahead of the next Monetary Policy Committee (MPC) meeting on 6 May 2021.

  • What was decided at the last BoE meeting?
  • How does the MPC influence inflation?
  • How might the pound be affected by the next meeting?

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