Gold rises ahead of Fed event, oil retrace on API surplus
Retail long bias in gold and oil drop, silver edges further into extreme long territory.
Gold Technical analysis, overview, strategies, and levels
Gold prices were in for a higher finish yesterday to cross and close above its 50-day moving average. It also was a breach of yesterday's 1st Resistance level to aid conformist breakout strategies which offered plenty on the breach higher even after the partial retracement. The technicals are still mostly neutral on the daily (more positive on the weekly), but in all the focus for today is on the US Federal Reserve (Fed) announcement that’ll include economic projections that'll be released for the first time since the coronavirus pandemic began, any expectations of a recovery, the interest rate dot plot, and Fed Chair Powell's forward guidance. That means technicals will hold less relevance, and we could be in for increased volatility for the non-yielding precious metal priced in dollars.
IG client* and CoT sentiment for Gold
Retail bias while still heavy long has dropped again on the price increase, from 75% yesterday to 72% as of this morning.
Gold chart with retail and institutional sentiment
Silver Technical analysis, overview, strategies, and levels
Unlike gold prices that finished higher, silver prices were in for a lower finish with a break of yesterday's 1st Support level on more than one occasion before eventually holding. Its price has recovered most of yesterday's losses as of this morning, and in turn the gold/silver ratio increase yesterday is at risk of being undone this morning. Here too, technicals may lose relevancy with tonight's Fed announcement, and in turn pivot points are far less likely to hold in the face of the fundamental event.
IG client* and CoT sentiment for Silver
In sentiment, unlike gold and oil where long bias is dropping, here it has risen a notch further into extreme long territory standing at 90%.
Silver chart with retail and institutional sentiment
Oil Technical analysis, overview, strategies, and levels
API's (American Petroleum Institute) reading showed a 8.4m surplus late yesterday, and in turn oil prices were in for a brief dip and an eventual close slightly below its open. Oil prices remained within its key pivot points oscillating just above yesterday's 1st Support level, and ahead of key events that'll include EIA's (Energy Information Administration) more encompassing oil inventories estimate, as well as the Fed's economic projections.
IG client* and CoT sentiment for Oil WTI
In sentiment, retail bias while still heavy long has dropped from 77% to 71% as of this morning's reading.
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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