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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.

Precious metals retrace as risk appetite improves

Gold and silver could be in for downside bias as US indices power higher.

Gold Source: Bloomberg

Gold Technical analysis, overview, strategies, and levels

It's a tricky situation for gold's price at this stage, as risk-taking is generally limited ahead of tomorrow night's US Federal Reserve (Fed) event (as well as those from other major central banks), and also where equities have been outperforming which tends to hurt the safe haven precious metal. Its price is now well below its 50-day moving average, and ongoing gains in equities could easily entice contrarian sell breakout strategies over conformist reversals, especially in the short-term should fresh record highs be made in US equities.

Current Technical Overview Consolidation - Negative Bias
Technical Overview Conformist Strategies Sell 1st Resistance At/Before Price, Buy 1st Support After Reversal
Technical Overview Contrarian Strategies Buy 1st Resistance Upon Breakout From Below, Sell 1st Support Upon Breakout From Above
S/L for 2nd Resistance 1520.4
2nd Resistance 1514.7
S/L for 1st Resistance 1509.0
1st Resistance 1503.2
Relative Starting Point 1491.8
1st Support 1480.4
S/L for 1st Support

1474.7

2nd Support 1468.9
S/L for 2nd Support 1463.2

IG client and CoT sentiment for Gold

Retail bias has risen 6% to a heavy long 73% as fresh shorts close out and longs initiate anticipating a move back up, though remains well below extreme long bias held by larger speculative traders as per the latest Commitment of Traders (CoT) report.

Gold sentiment Source: IG charts
Gold sentiment Source: IG charts

Gold chart with retail and institutional sentiment

Gold Source: IG charts
Gold Source: IG charts

Silver Technical analysis, overview, strategies, and levels

The moves in gold and silver have had little difference as of late, the two relatively in tandem but where this pair's price is showing a touch more of positive technical bias that has been eroded with the recent drop in precious metals. Whether one outperforms or the other, they both tend not to veer that far off from each other, especially as both are priced in dollars, and hence both are awaiting fundamental USD-related news, and affected by any changes in risk appetite with equities making fresh highs. The pair’s price has crossed and closed below its 50-day moving average, and as with gold downside bias may entice sell breakout contrarian strategies should momentum on the back of risk-related trades take place.

Current Technical Overview Consolidation
Technical Overview Conformist Strategies Sell 1st Resistance After Reversal, Buy 1st Support After Reversal
Technical Overview Contrarian Strategies Buy 1st Resistance Upon Breakout From Below, Sell 1st Support Upon Breakout From Above
S/L for 2nd Resistance 18.45
2nd Resistance 18.32
S/L for 1st Resistance 18.20
1st Resistance 18.07
Relative Starting Point 17.82
1st Support 17.57
S/L for 1st Support 17.44
2nd Support 17.31
S/L for 2nd Support 17.19

IG client and CoT sentiment for Silver

Silver sentiment Source: IG charts
Silver sentiment Source: IG charts

Silver chart with retail and institutional sentiment

Silver Source: IG charts
Silver Source: IG charts

Oil Technical analysis, overview, strategies, and levels

Positive trade news and increased risk appetite usually helps energy prices in rising higher. However, Chinese industrial profits and gains in equities primarily in the tech sector (that isn’t significantly reliant on oil as an input) have kept those recent gains in check, but where any future increases could give the energy commodity more positive technical bias. Prior to the Fed’s event we’ve got tonight’s American Petroleum Institute estimate for US oil inventories.

Current Technical Overview Consolidation - Positive Bias
Technical Overview Conformist Strategies Sell 1st Resistance After Reversal, Buy 1st Support After Reversal
Technical Overview Contrarian Strategies Buy 1st Resistance Upon Breakout From Below, Sell 1st Support Upon Breakout From Above
S/L for 2nd Resistance 58.39
2nd Resistance 57.78
S/L for 1st Resistance 57.36
1st Resistance 56.85
Relative Starting Point 55.83
1st Support 54.81
S/L for 1st Support 54.30
2nd Support 5.79
S/L for 2nd Support 53.27

IG client and CoT sentiment for Oil WTI

In terms of sentiment, it has risen slightly as fresh longs initiate, but stands close to the middle with any significant surge likely to cause a shift in bias.

Oil sentiment Source: IG charts
Oil sentiment Source: IG charts

Oil chart with retail and institutional sentiment

Oil Source: IG charts
Oil Source: IG charts
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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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