Gold retraces, oil oscillates despite EIA deficit
Longs pile in on the precious metal plummet, setting the stage for potential volatile movement.
Gold Technical analysis, overview, strategies, and levels
Conformist breakout strategies finally had a chance to outperform yesterday, but it wasn't to the upside rather a sell breakout strategy off of yesterday’s 1st Support. Although the technicals are flashing green in both the short-term and long-term, and with plenty of fundamental factors aiding the safe haven non-yielding metal including yesterday's US Federal Reserve minutes that considered reviving the promise to keep rates low until conditions are met as witnessed during the Great Recession, the two main factors pointing to a harsh squeeze opposite include serious potential future liquidity concerns as well as a speculative move against the heavy to extreme long bias held by traders. Technicals may hold less relevance today with the US dollar likely getting volatile on Non-Farm Payrolls data.
IG client* and CoT sentiment for Gold
From a sentiment standpoint, longs aren't getting out, with heavy long bias rising to 71% amongst retail traders, and still below CoT (Commitment of Traders) speculators at 85%.
Gold chart with retail and institutional sentiment
Oil Technical analysis, overview, strategies, and levels
Oil prices have failed to offer much volatility, even after yesterday's EIA (Energy Information Administration) US crude oil inventories estimate that showed a sizeable deficit of 7.2m, not that far off from API's reading the night before of a 8.2m drawdown. The net result on both days however has been ongoing oscillation within its key pivot points. Short-term technicals are more consolidatory, but the leftover volatility from the infamous May contract Monday rollover mayhem has meant long-term technicals are still showing volatility. A WSJ report regarding a potential OPEC+ breakdown and a spike in US coronavirus cases are still fundamental items to consider that could reintroduce volatility, and make technicals less relevant in the process as levels are expected to break with ease should that happen and end the current calm.
IG client* and CoT sentiment for Oil WTI
As for trader sentiment, retail long bias has moved only slightly higher to 58%, far less bullish than CoT at 83%.
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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