Gold finishes higher as yields retrace, oil lags on dented demand
Gold outperforms compared to silver as US dollar lags in the FX market, while oil fails to find a footing in the absence of a geopolitical shock.

GOLD: Drop in US yields and a rise in rate cut likelihoods aid the non-yielding precious metal
US government yields have continued to dip, and lower yields increase the attractiveness of non-yielding assets like gold, and as a result the slow but consecutive declines in the US 10-year yield for example have aided gold's price in finishing higher for a fourth consecutive session. More US data will be in play following yesterday's dismal Conference Board (CB) consumer confidence figure, primarily with tomorrow's final US GDP figure and Friday's durables data. Rising political risks, geopolitical risks that have failed to subside, and markets now majority pricing in another rate cut this October out of the Fed are all factors that have aided the precious metal’s price in remaining bid, and helping retail traders whose majority long bias has dropped 3% since yesterday morning on long profit-taking.

SILVER: Not able to outperform against gold but still finishing slightly higher for the session
The question of whether silver can continue to outperform relative to gold (or when prices decline to avoid a steeper fall) continues to keep investors wondering what the underlying reasons behind the recent price increases have been, especially with Monday's surge shifting technicals and taking its price back above the last of its main moving averages. Not that retail or institutional traders have been complaining however, as they are both heavy long in terms of bias, and the former upping that bias by increasing long positions when its price dropped. However, keep in mind that the US dollar in the FX market has been dropping, and hence the pair’s price should have been higher, suggesting a disconnect where the catalyst behind recent gains isn’t fundamental related.

OIL – US CRUDE: Another day, another finish lower as risk-off play dents appetite
Oil continues to be caught between two forces, with demand-side factors continuing to disappoint and pushing the energy commodity's price lower, but wary that any potential supply side shock would send its price surging higher as was the case two weekends ago. In terms of data, yesterday's American Petroleum Institute (API) estimate showed US crude oil stocks rising by 1.4M, and ahead of Energy Information Agency's (EIA) more encompassing estimate tonight expected to show a slight and insignificant deficit. Drawdowns however may be more likely in the coming weeks prior to Saudi's Aramco getting its output fully back online, as with the current prices still low it would be difficult for substitute production to rise. As for retail bias, it has jumped 11% to a now heavy long 72% as longs continue to add to positions.

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