Oil prices plummet, gold rises
Conflicting OPEC+ reports and a mixed EIA stockpile report test oil prices, while dovish Federal Bank testimony sends the dollar and yield lower aiding the gold prices.
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Gold technical analysis, overview, strategies, and levels
A breach of its previous first resistance level that acted as support thereafter, and meant contrarian breakout strategies outperformed as conformist reversals were stopped out on the move higher, prices at the upper extreme of the band and not that far off from crossing the last of its main long-term moving averages as seen on the daily chart. The US dollar was in retreat in the forex market while yields generally took a tumble, a US central bank on hold and dovish testimony from its chairman a positive catalyst for the non-yielding precious metal that has been able to hold its ground even when the dollar strengthens (as seen when CPI figures were released earlier in the week). The technical overview is a trickier one, positive technical bias building as it approaches its weekly first resistance level, the long-term time frame showing an eventual break but without any bias for direction.
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IG client* and CoT** sentiment for Gold
Retail traders are still extreme buy hoping for more positive movement.
Gold chart with retail and institutional sentiment
Oil WTI technical analysis, overview, strategies, and levels
Conflicting reports over whether an agreement was reached amongst OPEC+ members that would unlock more output as the United Arab Emirate's energy minister confirmed that one hadn't been reached, ongoing 'consultations between concerned parties' as oil traders await any updates on that front that would offer some certainty (and in turn tilt its short-term overview), conformist breakout strategies winning out on yesterday's plunge that took prices past its key support levels with ease. As for US stockpiles, Energy Information Administration reading showed an eighth consecutive drawdown of 7.9m barrels, but gasoline stocks up by one metre opposite deficit expectations (demand dropping) and distillate rising even more by 3.7m barrels. All eyes on any OPEC+ negotiation updates, elsewhere negotiations that would bring back more supply pushed until the middle of next month.
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IG client* and CoT** sentiment for Oil WTI
As for sentiment, retail bias has shifted from a previous majority short 57% to slight buy 54%.
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 for the outer circle. Inner circle is from the previous trading day.
**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
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