Oil prices suffer third successive drop

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Gold technical analysis, overview, strategies, and levels

Another spike that couldn't stick, the US ADP non-farm miss sending the greenback lower early on and in the case of gold prices taking it beyond its previous first resistance level and closer towards its second resistance. This is before ISM's record services reading and tightening comments out of voting Fed member Clarida, sent it back down to finish little changed from where it started. And where both breakout and reversals (on the move back down, initial move past first level didn't trigger a reversal) had plenty to cheer about.

We're not out of the woods yet in terms of moves that could take prices beyond key levels with ease, a few items tonight out of the US that includes more Fed speak (non-voters), and the big one, tomorrow's US NFP that'll affect the dollar, yields, and general risk appetite, technicals usually irrelevant when it comes to significant fundamental events.

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IG client* and CoT** sentiment for Gold

Going into the event retail traders are extreme buy at 83%, silver has risen to 93%, and platinum still at 90%.

Gold chart with retail and institutional sentiment

Oil WTI technical analysis, overview, strategies, and levels

Successive volatile sessions for Oil - US Crude prices that once again gave conformist sell-breakout strategies the advantage with a move beneath its previous first and second support levels. And tilting a technical box into the red - while elsewhere its ADX reading is climbing closer to trending territory, an RSI edging lower into oversold territory, and prices reaching the lower end of the band.

EIA's surprise surplus of 3.6 million barrels was opposite expectations of a 3.2 million deficit, though API's smaller deficit the night before had traders wary it would match those expectations. But a positive was gasoline stocks dropping by 5.3 milion barrels, well above 1.8 million deficit expectations. Distillate rose by less than a million, opposite expectations for a drop.

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IG client* and CoT** sentiment for Oil WTI

As for sentiment, it has taken what was a slight buy 53% into heavy long territory at 65% as of this morning, though nowhere near extreme buy bias held by CoT speculators in what has been a consistent theme for the latter.

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.}