Precious metals end the week range-bound

Despite US dollar weakness, commodity prices remained relatively range-bound.

GOLD: Consolidatory moves as volatility fails to pick up

Despite last week’s volatility label on anticipated risk moves intraweek, gold’s price remained relatively sedate and range-bound as both dollar and equities were weaker at the end of the week. The pair still enjoys long-term positive technical bias as price is above all its main weekly moving averages, but safe haven appetite will need to improve as most of its technical indicators remain neutral, and with a negative Directional Movement Index (DMI) cross occurring on the weekly. The lack of movement offered retail longs little chance to close out, with heavy long bias down 3% since the start of last week. Institutional bias is dropping however, on a 15,013 lot reduction in gold longs and a simultaneous increase in short positions by 7,523 lots pushing extreme long bias a couple percent lower.

SILVER: CoT heavy long bias starts to drop while retail sentiment still in extreme long territory

As with gold, appetite for precious metals is dropping from a Commitment of Traders (CoT) standpoint, though still remains heavy long at 67%, dropping 3% from last week on a reduction in long positions by 5,004 lots and a simultaneous increase in shorts by 1,761 lots. Retail sentiment however, is little changed as the moves were relatively range-bound for precious metals in general. A negative DMI cross has occurred on the weekly here as well, and where some of its main technical indicators on the weekly (and all of those on the daily) are neutral.

OIL – US CRUDE: Range-bound movement as heavy long traders continue to await upside movement

Last week’s main ranges were never reached, though expectations are that should it reach, it could be on the back of any volatility and entice conformist breakout strategies over contrarian reversal ones. Friday’s worse than expected Gross Domestic Figures (GDP) out of China was somewhat offset with better than expected industrial production figures, though as it stands its dented global demand that is weighing in on the energy commodity’s price. In terms of the latest supply news, Baker Hughes US oil rig count release on Friday showed only an increase of 1 compared to last week’s 712 count. Lastly, the latest sentiment numbers show retail bias up a couple percent and back at extreme long levels, just as institutional bias starts to drop a notch to a heavy long 75% as longs get tested. However, both long and short positioning has increased, the former by 16,123 lots and the latter by 14,324 lots.


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