Gold, silver, and oil plummet in volatile session

Gold Technical analysis, overview, strategies, and levels

As tempting as it was to view the recent moves in gold as a bull trend technical overview, the increased volatility has meant that pivot points (to the upside or downside) were more easily broken, and in turn conformist breakout strategies for limited profit-taking was more ideal before contrarian reversals came in play, with both yielding results as is the case in volatile movement that witnessed its key pivot points break on more than one occasion. The US dollar a relative underperformer against the FX majors, but at this stage its less of a factor in determining where gold’s price will settle as its technical overview remains volatile.

IG client^* and CoT sentiment for Gold

Retail bias at a heavy long 64% yesterday has now risen to a heavier 68% as shorts get enticed into closing out and longs initiate anticipating further gains, yet is still far below that of institutional bias at 88%.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

Silver prices broke through not just yesterday's 1^st Support level, but also its 2^nd Support level, bouncing off of its Weekly 1^st Support level in a clear undoing of its previous bull trend overview that has now shifted to volatile. Buy-on-reversal also failed, as the volatility spread to engulf not just equities and gold, but silver as well which in turn has been in favor of breakout strategies over fading and reversal ones prone to getting stopped out. As it stands, from a technical standpoint, its key technical indicators have shifted from green, and combined with a non-trending ADX (Average Directional Index).

IG client^* and CoT sentiment for Silver

In sentiment, retail bias has risen back up to further long extremes standing at 90%.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

Risk-related moves and fears of a slowdown in economic growth (or in some areas downright contraction) have kept the market from providing a floor on oil prices, which suffered yesterday a drop yesterday beyond its 1^st Support in a clear conformist sell breakout move. In data, API's (American Petroleum Institute) figure showed a small 1.3M surplus, and EIA (Energy Information Administration) is up next expected to show a similar 2.3M increase, though as always, it’ll be the fundamental effects of the coronavirus and its clear dent to the travel sector and economic growth that will play a larger role for the energy commodity.

Learn more about oil trading.

IG client^* and CoT sentiment for Oil WTI

Any downside movement remains painful for both retail and CoT (Commitment of Traders) traders continuing to hold extreme long bias, the former rising 3% to an extreme long 84% and the latter at 78% as per last Friday’s report.

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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