For the first time since January 2020, the 50-day moving average (green line) crossed below the 100-day moving average (magenta line), illustrated on today’s chart labelled as “C”.
This is commonly referred to as a death cross. Most frequently the term is about when the 50dma crosses below the 200dma. However, it can be used as a term to describe whenever a shorter-term moving average moves below a longer-term one.
In the middle of January at the start of 2020 is the last time we had these averages cross back (item “A” on the chart) into a bullish alignment, (shorter above longer) when the 50dma moved above the 100dma. This correlation remained for the monumental rally lasting eight months that eventually brought gold to its all-time high. the differential between the two averages remained approximately $60 as they rose in unison for nine straight months. In the last week of September 2020, the difference between the two averages reached its widest distance of almost $100 (chart example B). The widening between the two occurred after gold was on its way down clearly showing how moving averages are by definition a lagging technical indicator. Then in October, we began to see the price difference between the averages contract which led to today’s death cross.
Currently, the 50dma in gold futures is fixed at $1908.70, and the 100dma is at $1910.60. On a technical basis, this is a bearish signal.
According to Investopedia, a death cross is, “a technical chart pattern indicating the potential for a major selloff. The death cross appears on a chart when a stock’s short-term moving average crosses below its long-term moving average. Typically, the most common moving averages used in this pattern are the 50-day and 200-day moving averages.”
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1,941.21.
The projected lower bound is: 1,814.41.
The projected closing price is: 1,877.81.
A white body occurred (because prices closed higher than they opened).
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 29 white candles and 21 black candles for a net of 8 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 59.5668. This is not an overbought or oversold reading. The last signal was a buy 3 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 46.09. 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 sell 71 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 -53. This is not a topping or bottoming area. The last signal was a buy 4 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 sell 5 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 0.557 at 1,879.160. Volume was 8,900% above average (trending) and Bollinger Bands were 31% narrower than normal.
Open High Low Close Volume 1,877.600 1,883.010 1,875.100 1,879.160 16,993
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1,891.32 1,902.82 1,791.13 Volatility: 33 21 24 Volume: 1,699 340 85
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 4.9% above its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods.
Our volume indicators reflect very strong flows of volume out of XAU= (bearish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 1 periods.