CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Gold severely tested in liquidity crunch, gaps higher on Fed rate cut

Traders continue to hold extreme long bias in gold, silver and oil anticipating move back up.

Gold Technical analysis, overview, strategies, and levels

Tempting as it was to label the moves towards $1,700 and its technical overview as a bull trend, last week’s Weekly overview remained volatile, and in turn meant that conformist breakout strategies in either direction could outperform. Outperform it did with its price crashing through both 1st Support and 2nd Support levels, and aiding conformist strategies at the expense of reversals. Although equities were in freefall, safe haven weren’t spared the rout later in the week as the liquidity crunch spread to engulf other asset classes, and the US dollar was an outperformer in the FX market.

IG client* and CoT sentiment for Gold

Retail bias here has surged to extreme long levels no doubt squeezed by the recent moves, and while gold long positions have dropped by 29,883 lots and shorts by 9,681 lots according to the latest CoT (Commitment of Traders) report, putting in percentage terms has taken the bias a notch higher to an extreme long 90%.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

As bad a week as it was for gold, it was far worse for silver registering a double-digit percentage decline against the surging US dollar and in turn taking the gold/silver ratio to fresh highs breaching the 105s as of this morning. That was in line with its volatile technical overview, and aiding conformist breakout strategies to the downside for a break beneath last week’s Weekly (and Daily) support levels.

IG client* and CoT sentiment for Silver

It spells bad news for both retail and CoT speculators however, with the former increasing their extreme long bias to 94% (the bulk of those longs initiated well above market price) and the latter unchanged at a heavy long 71% with a reduction in both silver long and short positioning (as was the case for gold), to the tune of 7,453 and 4,097 lots respectively.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

Although oil prices started last week with a massive gap lower, the intraweek moves offered both a conformist breakout and a contrarian reversal. There are plenty of factors here, the negative ones being transportation set to plummet even further as travel bans rise and more countries go into lockdown, as well as reports that Saudi Arabia was snapping up oil tankers ahead of its plans to flood the market with more oil. Geopolitical tensions failing to subside and shale companies in need of liquidity are a couple factors that could offer a supply shock. In oil data, Baker Hughes was little changed, increasing by 1 to 682 from the week before, though expect those figures to get tested severely should current price levels in oil persist.

Learn more about oil trading.

IG client* and CoT sentiment for Oil WTI

In sentiment, retail bias has dropped since the start of last week, as has CoT bias with sizeable similar 24K lot increases in both long and short positioning.

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.

Be sure to request IG’s Weekly & Daily Market Report when you open an account with IG Dubai and get access to the full information on the FX majors, commodities, indices, and Bitcoin.

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.

React to volatility on commodity markets

Trade commodity futures, as well as 27 commodity markets with no fixed expiries.

  • Wide range of popular and niche metals, energies and softs
  • Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
  • View continuous charting, backdated for up to five years

See opportunity on a commodity?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a commodity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Analyse and deal seamlessly on fast, intuitive charts
  • Get spreads from just 0.3 points on Spot Gold
  • See and react to breaking news in-platform

See opportunity on a commodity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.