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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.

Silver outperforms while gold retraces off the highs, oil surges on API deficit

11M API deficit sends oil prices higher, while recessionary fears keep gold’s price oscillating at the highs.

Silver Source: Bloomberg

GOLD: Oscillating at the highs as safe haven demand fails to subside

The lack of progress in US-China trade talks as the September 1 deadline approaches where both sides will apply fresh tariffs on each other has meant that yields are continuing to drop, and the US yield curve suffering a deepening inversion. That is keeping gold’s price continuing to experience fresh highs, even if its eventually retracing back down as of this morning. It’s a bull trend technical overview backed by significant fundamentals, but stalling in the sense that the moves have been open to eventual retracement, and hence contrarian reversal strategies might be entertained following breakout strategies on limited profit-taking for those not wanting to hold for the mid to long-term. Retail bias is still majority long but has dropped 5% on long profit-taking.

Gold Source: IG charts
Gold Source: IG charts

SILVER: Bull trend accelerates as volatility hits the pair hard

Although the pair stalls at times following significant movement, the strategies more in line with its current price movement are that of a bull trend technical overview as its price accelerates to the upside, outperforming gold significantly. All its short and long-term technicals are flashing green, yet the surprise has been its outperformance compared to gold. But traders aren’t complaining, retail bias is still extreme long but down 4% on more profit-taking as shorts get squeezed, and institutional bias only recently upped their bias to a heavy long 66%, also beneficiaries of the recent gains.

Silver Source: IG charts
Silver Source: IG charts

OIL – US CRUDE: Massive API deficit takes the energy commodity’s price higher

Although oil’s technical overview is still showing a touch of negative bias with its price below all its main long-term moving averages and its short-term bear trend channel still holding, yesterday’s API deficit of 11M sent the energy commodity’s price back up towards the upper end of its channel. However, any moves on API aren’t usually confirmed until EIA’s more encompassing estimate is released later today, expected to show a more modest 2.8M deficit. That’s the supply side. On the demand side, recessionary fears and no update on the trade war subsiding ahead of fresh tariffs this Sunday may limit gains in this pair’s price, especially if the yield curve inversion worsens. In terms of bias, retail traders were on the right side of this trade and dropped sentiment 13% since yesterday to a more modest majority long 55% on range-trading longs taking profit and shorts anticipating retracement.

Oil Source: IG charts
Oil Source: IG charts

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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