Safe haven gold and silver dented on increased risk appetite, but oil gains
Technicals hurt following significant fundamental news, as gold and silver price stall at the highs while oil gains on expected increase in demand following US-China trade talks announcement.
GOLD: Safe haven hurt this morning but thus far has failed to dent its bear trend technical overview
Yesterday’s short-term resistance level for the pair was only briefly breached and continued to hold as although the greenback was a relative underperformer amongst the FX majors, the easing of risks, the BoC on hold following an unchanged RBA rate announcement, and today morning’s US-China news on trade talks slated for October have put those gains at risk. From a technical standpoint – and the recent moves have been more fundamental – its still a bull trend technical overview where all its main technical indicators are flashing green. But today morning’s news aside, more fundamental items are in store for the remainder of the week including tomorrow’s NFP and Powell’s speech where investors will be tuned in to see if he’ll discuss future rate cut likelihoods, items that’ll influence both aspects of this non-yielding precious metal.
SILVER: Another significant gain but being undone as of today morning
It was another surge in this pair’s price closer to the infamous 20 level, though those gains are in question as of today morning following the US-China trade talk restart. As it stands, the pair’s bull trend hasn’t just taken place, but gathered steam over the past few days, and any heavy retracement with a lack of liquidity as market-makers avoid placing trade in the face of significant movement could make breakout strategies far more ideal than fading ones, even if it runs contrary to the pair’s conformist strategic plays. In terms of bias, retail bias has dropped again by 2% to a heavy long 76%, following what has been mostly months of 80%+ bias amongst retail traders awaiting retracement back up.
OIL – US CRUDE: Negative bias mostly undone by risk-on atmosphere, retail bias shifts
The main focus initially was on whether API would show a significant deficit with the result instead a slight 0.4M surplus ahead of today’s more encompassing EIA estimate expected to show a 2.4M deficit. However, with an easing of political risks globally and US-China trade talks, demand side worries have dropped and taken this pair’s price higher towards its modest bear trend line that is barely holding at this stage. OPEC members have been shifting sales away from the US in the hopes that a drawdown in US inventories will indirectly prop up oil prices, but the inability of API’s estimate to register another significant deficit may keep supply worries at bay for the time being, putting the focus more on demand ahead of tomorrow’s US NFP figure. In terms of retail bias, it has shifted from a previous heavy long 70% to a now slight majority short 54% as range-trading continues to occur.
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