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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Gold prices plummet, oil rises

US-Russia-Saudi join action in oil unlikely, API posts 10.5M surplus.

Gold Source: Bloomberg

Gold Technical analysis, overview, strategies, and levels

After two days of relative oscillation, conformist traders were in for a treat with a break of yesterday’s 1st Support level (and the 50-day moving average) that took its price very close to its 2nd Support level. It has since partially recovered as of this morning, and where the US Federal Reserve's announcement of its FIMA (Foreign International Monetary Authorities) repo facility to ease global US dollar illiquidity may weaken the US dollar, and in turn aid products priced in the US dollar should that liquidity make its way into the global financial and eventually commodities markets. There will also be significant US data this evening that could make the US dollar the more active FX pair as the country is on the verge of becoming the new epicenter of the virus.

Gold Technical Indicators Source: IG charts

IG client* and CoT sentiment for Gold

In sentiment, retail bias is unchanged at a heavy long 76%, tested alongside institutional traders holding a heavier 91% long bias.

Gold sentiment Source: IG charts

Gold chart with retail and institutional sentiment

Gold Source: IG charts

Silver Technical analysis, overview, strategies, and levels

Both gold and silver were in for retreat yesterday, but silver's price movement was far more rangebound and didn't reach either end of its key pivot points, and in turn not offering a play for conformist nor contrarian strategies. Gold underperforming compared to silver meant that the gold/silver ratio has dropped slightly into the 112s, with silver needing to outperform by a significant margin to undo the gains in the ratio over the past five weeks.

Silver Technical Indicators Source: IG charts

IG client* and CoT sentiment for Silver

Silver sentiment Source: IG charts

Silver chart with retail and institutional sentiment

Silver Source: IG charts

Oil Technical analysis, overview, strategies, and levels

Despite finishing yesterday's session with a higher price (for a change), oil prices failed to reach either end of yesterday's key pivot points, but where it has continued to test oil producers, suppliers, and anything else oil-related. Talk that the US may join any potential Russia-Saudi talks regarding propping up oil prices to aid each of their respective energy sectors hasn't gained traction, and thus far physical oil has been selling for far less than financial. In oil data, API's (American Petroleum Institute) US crude oil stocks showed a 10.5M surplus, no surprise given the majors prepare to flood the world with oil at a time when demand is plummeting. EIA's (Energy Information Administration) estimate is up next, with expectations for a significant surplus.

Learn more about oil trading.

Oil Technical Indicators Source: IG charts

IG client* and CoT sentiment for Oil WTI

Oil sentiment Source: IG charts

Oil WTI chart with retail and institutional sentiment

Oil Source: IG charts

*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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This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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.

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