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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Negative technical bias in gold & silver ahead of potential Fed rate cut

Range-bound movement to the downside in commodities set to get affected by tonight’s US Fed announcement.

SILVER Source: Bloomberg

Gold Technical analysis, overview, strategies, and levels

Gold was in for a slight plummet in the early trading session yesterday, as the negative technical bias gathered a bit of pace, and pressured heavy long retail and institutional traders. But while the technical outlook is showing more negative bias in the short-term and with a negative Directional Movement Index (DMI) cross occurring yesterday, that matters little as we approach the big event tonight. Should the US Federal Reserve reduce interest rates or highlight more liquidity interventions and the attractiveness of the greenback will drop. Opting not to do that signifying the last two rate cuts were just a pause and not a trend and the non-yielding precious metal could be in for further retracement. Either way, its contrarian breakout strategies that may be more ideal than conformist reversal or fading ones, or at the very least opening a position counter to the market done after a reversal.

Current Technical Overview Consolidation - Negative Bias
Technical Overview Conformist Strategies Sell 1st Resistance At/Before Price, Buy 1st Support After Reversal
Technical Overview Contrarian Strategies Buy 1st Resistance Upon Breakout From Below, Sell 1st Support Upon Breakout From Above
S/L for 2nd Resistance 1515.6
2nd Resistance 1509.9
S/L for 1st Resistance 1504.3
1st Resistance 1498.7
Relative Starting Point 1487.4
1st Support 1476.1
S/L for 1st Support 1470.5
2nd Support 1464.8
S/L for 2nd Support 1459.2

IG client and CoT sentiment for Gold

Gold sentiment Source: IG charts
Gold sentiment Source: IG charts

Gold chart with retail and institutional sentiment

Gold Source: IG charts
Gold Source: IG charts

Silver Technical analysis, overview, strategies, and levels

Both gold and silver suffered in yesterday's early session, but both of them being priced in dollars and being precious metals will be affected by tonight's US data and central bank decision, and that's before we get more significant data on Friday in the form of Non-Farm Payrolls.

Current Technical Overview Consolidation
Technical Overview Conformist Strategies Sell 1st Resistance After Reversal, Buy 1st Support After Reversal
Technical Overview Contrarian Strategies Buy 1st Resistance Upon Breakout From Below, Sell 1st Support Upon Breakout From Above
S/L for 2nd Resistance 18.4
2nd Resistance 18.28
S/L for 1st Resistance 18.16
1st Resistance 18.03
Relative Starting Point 17.79
1st Support 17.54
S/L for 1st Support 17.42
2nd Support 17.30
S/L for 2nd Support 17.17

IG client and CoT sentiment for Silver

Going into tonight's event retail traders are holding extreme long bias at 88% and up a notch on yesterday’s reading, while institutional traders are at a heavy long 68%.

Silver sentiment Source: IG charts
Silver sentiment Source: IG charts

Silver chart with retail and institutional sentiment

Silver Source: IG charts
Silver Source: IG charts

Oil Technical analysis, overview, strategies, and levels

The first of this week's US oil inventories reports was released yesterday night with American Petroleum Institute (API) registering a 0.6M reading following last week's 4.45M reading. Energy Information Agency is up next expected at a similar 0.5M though as with most of the asset classes they'll likely be affected by tonight's Fed monetary policy announcement and what its forward guidance will be for the world's largest economy and in turn, appetite for the energy commodity. Oil prices were in for a significant retracement yesterday, with the dip reportedly caused by an industry report that stocks at the Cushing hub had risen.

Current Technical Overview Consolidation - Positive Bias
Technical Overview Conformist Strategies Sell 1st Resistance After Reversal, Buy 1st Support After Reversal
Technical Overview Contrarian Strategies Buy 1st Resistance Upon Breakout From Below, Sell 1st Support Upon Breakout From Above
S/L for 2nd Resistance 58.87
2nd Resistance 57.39
S/L for 1st Resistance 57.91
1st Resistance 56.44
Relative Starting Point 55.48
1st Support 54.52
S/L for 1st Support 54.05
2nd Support 53.57
S/L for 2nd Support 53.09

IG client and CoT sentiment for Oil WTI

In terms of sentiment, it has risen slightly as fresh longs initiate, but stands close to the middle with any significant surge likely to cause a shift in bias.

Oil sentiment Source: IG charts
Oil sentiment Source: IG charts

Oil chart with retail and institutional sentiment

Oil Source: IG charts
Oil Source: IG charts
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