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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.

Oil prices edge higher as shale production set to slow

Gold and silver recover off of the lows as ‘sell everything’ pressures fade.

Oil Source: Bloomberg

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.

Gold Technical Indicators Source: IG charts

IG client* and CoT sentiment for Gold

Gold sentiment Source: IG charts

Gold chart with retail and institutional sentiment

Gold Source: IG charts

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.

Silver Technical Indicators Source: IG charts

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 sentiment Source: IG charts

Silver chart with retail and institutional sentiment

Silver Source: IG charts

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.

Learn more about oil trading.

Oil Technical Indicators Source: IG charts

IG client* and CoT sentiment for Oil WTI

Oil sentiment Source: IG charts

Oil WTI chart with retail and institutional sentiment

Oil Source: IG charts

*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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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.

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