Oil prices edge higher as shale production set to slow
Gold and silver recover off of the lows as ‘sell everything’ pressures fade.
Gold Technical analysis, overview, strategies, and levels
Gold prices were also in for volatile movement yesterday, briefly crossing below its 50-day moving average before recovering most of those losses by the end of the session. Futures are pointing higher this morning and the greenback has been in retreat in the FX market, as a buy everything moment also aids the precious metal's price in recovering off of the lows. However, the US Federal Reserve's (Fed) announcement regarding its corporate bond buying program may not necessarily translate into gains for gold prices over the longer term, especially if it doesn't alleviate liquidity issues outside the scope of its program. We've got US data later today and the Fed's Powell testifying, and if the goal of the central bank is to prevent another plummet in the financial markets, he may be poised to talk up improvements despite rising coronavirus cases.
IG client* and CoT sentiment for Gold
Gold chart with retail and institutional sentiment
Silver Technical analysis, overview, strategies, and levels
Silver prices ended the day only slightly lower, recovering off of its 200-day moving average (MA) just as its 50-day MA is about to cross above its 100-day MA. There was little change between both gold and silver, and in turn keeping the gold/silver ratio rangebound within the 99-100 handle. From a technical standpoint, silver's price is below all its main short-term moving averages but above all its long-term ones, with a positive DMI (Directional Movement Index) and a trending ADX (Average Directional Movement index), its bull trend technical overview stalling at the highs and severely tested on the daily.
IG client* and CoT sentiment for Silver
Retail traders continue to hold an extreme long bias and are little changed from yesterday's 89%.
Silver chart with retail and institutional sentiment
Oil Technical analysis, overview, strategies, and levels
Oil prices managed to finish higher yesterday despite rising coronavirus cases that threaten to force lockdowns back into place in certain areas, with the Fed's announcement aiding liquidity. A part of that may be down to supply, as the US EIA (Energy Information Administration) said yesterday that production from seven major US shale formations would likely drop to a two-year low coupled with a WSJ report that banks are cutting credit lines to shale drillers. Furthermore, comments from the UAE energy minister regarding non-compliant members ahead of the compliance meeting this week also has reinforced expectations of cuts, else collectively face lower oil prices, and the effect it would have on oil-reliant entities and companies such as BP, which said it took a $17.5bn write-down on its assets and may leave some of its oil and gas assets in the ground due to the current lower-priced atmosphere in the energy markets.
IG client* and CoT sentiment for Oil WTI
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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