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Crude Oil, Gold Price Talking Points:

  • Substantial moves in the price of Gold and Crude oil may spur a change in trend for ETF flows
  • Next week’s FOMC meeting could spur greater capital movement as outlook’s change
  • See how IG Clients are positioned on Gold and Crude oil with Retail Trader Sentiment Data

Crude Oil, Gold Price Action Sees ETF Traders Reduce Exposure

Gold prices mounted a recovery rally in the latter half of the week, climbing above $1,285 an ounce and testing a key Fibonacci level in the process. After tagging 5-month lows on Tuesday, gold’s price outlook appeared grim. That said, there are signs the tide may be turning for the precious metal and some analysts believe there is room for bullish continuation. While some are convinced the metal is destined for better times, ETF fund flows from the GLD ETF suggest not all share in the optimism.

ETF Traders Reduce Exposure to Gold

gold price chart

The fund recorded $150 million in outflows up to Thursday, pushing the year-to-date withdrawal amount to $1.64 billion. During that time, GLD climbed $0.33. After multiple failed attempts to break beneath support from August 2018, the outflow trend may pause as traders look to reassess the metal’s appeal.

Check out our Second Quarter forecasts for the Dow Jones, Gold, Crude oil and more.

Crude ETF Traders Miss out on Recovery Rally

Alongside Gold, the USO Crude oil ETF has also witnessed net outflows year-to-date, reducing exposure even as the commodity climbed. Total net outflows amount to nearly $500 million for the year, effectively reducing the fund’s market capitalization by 25%. Ahead of Easter weekend, the fund saw its second largest intraday outflow over the last year at $86 million. Friday’s Crude price action could beget more selling as traders grapple with potential OPEC announcements at President Trump’s behest.

crude oil price chart

That said, both commodities will look to next week’s FOMC rate decision for influence. Strong US GDP could bring rate hikes back into the conversation, a potentially bearish development for both Gold and Crude. In the meantime, follow @PeterHanksFX on Twitter for updates and market analysis.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more: History Suggests the Stock Market Will Climb in the Weeks After Easter

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.