Oil plummets while precious metals register fresh gains

Gold Technical analysis, overview, strategies, and levels

With equities in relative retreat, gold prices managed to finish the session higher. Overall, its technical overview has remained tested, with a stalling bull trend on the weekly long-term overview but where in the short-term it has been relatively rangebound. Although this product is priced in dollars, today's ECB (European Central Bank) announcement will be viewed in the context of whether global monetary easing will continue and rates will remain low (or in the case of some central banks, negative), as that has a tendency to aid the non-yielding precious metal.

IG client and CoT sentiment for Gold

That's not to say further gains can't be made in the longer term, but the lack of follow through intraday is testing heavy long traders, with retail bias at a heavy long 70% and institutional bias (as per last Friday's Commitment of Traders report) at an extreme long 87%.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

After silver underperformed compared to gold on Tuesday, yesterday's moves resulted in silver outperforming this time around, and where the closely watched palladium volatility registered fresh record highs that have been squeezing shorts significantly.

IG client and CoT sentiment for Silver

Retail bias here is extreme long at 89% and is a common theme amongst traders when it comes to precious metals holding heavy to extreme long bias in silver, gold and platinum. The exception is palladium where they hold an opposite extreme short 87%. CoT traders hold a heavy to extreme long bias in all four precious metals, with the long bias least heavy in silver standing at 72%.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

A lack of volatility over the past week or so has kept oil prices relatively rangebound, and close to its main moving averages (MA) including its 200-day and 100-day MA's. But yesterday’s jolt shook all of that as fears of the China virus spreading putting the city on lockdown and shifted travel plans, hurting travel stocks and the energy commodity it relies on heavily, and where its price broke past the last of its main MA’s in a volatile session befitting breakout strategies. The first of this week's main oil inventory data was yesterday's API (American Petroleum Institute), which showed a 1.6M surplus after last week's slight 1.1M surplus. But the more encompassing EIA (Energy Information Administration) figure will be released this evening, with expectations for a slight 0.1M deficit following last week's 2.5M deficit. As always, focus should also be on overall risk appetite, the travel sector reliant on energy, and geopolitical instability in oil rich countries.

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IG client and CoT sentiment for Oil WTI

In sentiment, retail bias is now at an extreme long 80%, not that far off institutional bias at 88%.

Oil WTI chart with retail and institutional sentiment

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