Gold 1 OZ (XAU=X) likely to be determined by trader reaction to the downtrending Gann angle at $1667.80
Gold futures are trading at their highest level since March 26 shortly after the regular session opening on Monday. The move is being fueled by concerns over a global recession caused by the coronavirus pandemic. A relatively flat U.S. Dollar is also helping to boost demand for the dollar-denominated asset.
Short-term, increased demand for stocks may actually be helping gold because it dampens the chances of market call selling, while freeing up funds to buy the precious metal. In other words, gold is being treated like an investment instead of a funding asset.
Longer-term, the tremendous amount of fiscal and monetary stimulus injected into the financial system recently is bullish for gold.
Daily Technical Forecast
Based on the early price action and the current price at $1674.60, the direction of the June Comex gold futures contract the rest of the session on Monday is likely to be determined by trader reaction to the downtrending Gann angle at $1667.80.
A sustained move over $1667.80 will indicate the presence of buyers. The next target angle is $1687.80. This is the last potential resistance angle before the $1698.00 and $1707.80 main tops.
A sustained move under $1667.80 will signal the presence of sellers. This could trigger a break into a short-term Fibonacci level at $1651.40, followed by a short-term 50% level at $1637.00 and an uptrending Gann angle at $1624.00.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 1,566.87.
The projected upper bound is: 1,721.03.
The projected lower bound is: 1,569.88.
The projected closing price is: 1,645.45.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 80.2314. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 4 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 58.57. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 11 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 78. This is not a topping or bottoming area. The last signal was a buy 11 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 8 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 27.750 at 1,644.200. Volume was 8,900% above average (trending) and Bollinger Bands were 109% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,612.64 1,593.30 1,514.95
Volatility: 32 30 20
Volume: 5,429 1,086 271
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAU= is currently 8.5% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 0 periods.