Gold prices suffer a flash crash
Both retail and CoT speculator bias extreme buy in a test of longs especially those initiated following last Friday’s Non-Farm Payrolls report.
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Gold technical analysis, overview, strategies, and levels
Spot Gold prices spent most of the week in oscillation before Friday's Non-Farm Payrolls (NFP) report sent it tumbling, the greenback outperforming during that session and seeing record-low real yields rising a bit off of the lows.
In the process, and as expected for a fundamental event, breakout strategies outperformed for both time frames, and conformist strategies for the weekly winning out on a breach of both of its previous weekly support levels, as prices find support at a key mid-term support level this morning. The technicals have turned more negative on the daily with a negative DMI cross occurring, prices piercing the lower end of the band and an RSI in oversold territory, and where in this weekly time frame conformist strategies remain breakouts even if it manages to retrace back towards an average following this morning's volatility.
The fact that this occurred early on and opposite majority trader bias suggests it’s a speculative move, though even prior to NFP the moves in gold had suggested a breakdown in the classic correlations. It’s now a question of whether investors on the Exchange Traded Funds front will continue to hold and add to positions in their portfolio.
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IG client* and CoT** sentiment for Gold
CoT short positions rose by 2,508 lots while longs dropped by 545, taking extreme buy bias to 78%, while for retail traders it surged to 87% prior to the flash crash, dropping thereafter to 79% in a clear test of fresh longs initiated on the plummet late last week.
Gold chart with retail and institutional sentiment
Oil WTI technical analysis, overview, strategies, and levels
Less of a play for oil prices towards the end of last week with the real moves occurring at the start in a real test for its current stalling bull trend technical overview in this time frame where contrarian strategies won out, and running in contrast with its volatile daily overview with prices testing key levels in plenty of sessions as of late.
The technical boxes are far less bullish than at the start of last week for this time frame, and on the fundamental front its Delta variant woes vs. geopolitical tensions.
As for the number of US oil rigs out of Baker Hughes, it rose by two to 387, gas rigs unchanged from the week before. In sentiment, CoT speculator bias is still extreme buy though down a notch from the previous week report on a big drop in long positions and a smaller increase in shorts.
IG client* and CoT** sentiment for Oil WTI
As for retail traders, the near 8% drop in price has caused a shift in sentiment from a majority short 56% at the start of last week to start this week off an opposite heavy buy 64%.
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 for the outer circle. Inner circle is from the previous trading day.
**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
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