Gold 1 OZ (XAU=X) 3.5-month-old price uptrend is still in place
Gold prices are modestly up in early U.S. trading Wednesday. I reported yesterday the bulls needed a new fundamental news spark, and they got one today, as a geopolitical hotspot has flared up in Asia. April gold futures were last up $2.00 an ounce at $1,330.50. May Comex silver was last down $0.002 at $15.83 an ounce.
There is a geopolitical development that has the attention of the world marketplace at mid-week. India and Pakistan have exchanged military strikes on each other the past two days. India bombed what it said was a terrorist camp in Pakistan, with Pakistan retaliating by shooting down two Indian aircraft. This news has Asian stock and financial markets on edge. Any escalation of this situation will prompt more safe-haven demand for gold and silver.
Asian and European stock markets were mostly lower overnight. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins. There is some risk aversion in the marketplace today, especially in Asian markets.
Brexit concerns still have European traders just slightly worried, but it appears Prime Minister Theresa May and Parliament have agreed to extend the Brexit deadline past late-March if a deal on the U.K. exiting the European Union is not reached.
Traders, investors and markets did not show big reactions to Federal Reserve Chairman Jerome Powell’s testimony to the U.S. Senate on Tuesday. Powell sounded a more dovish tone on U.S. monetary policy, which is what most expected. Powell speaks to the House of Representatives today.
Technically, the April gold bulls have the firm overall near-term technical advantage. A 3.5-month-old price uptrend is still in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,350.00.
Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the February low of $1,304.70. First resistance is seen at this week’s high of $1,334.90 and then at $1,340.00. First support is seen at $1,323.30 and then at $1,320.00.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1,342.22.
The projected lower bound is: 1,299.21.
The projected closing price is: 1,320.71.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with PREC.M.XAU=). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 21.3989. This is not an overbought or oversold reading. 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 53.94. 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 4 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 1. This is not a topping or bottoming area. The last signal was a sell 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 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -9.250 at 1,319.310. Volume was 8,900% above average (trending) and Bollinger Bands were 17% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,326.49 1,298.30 1,246.74
Volatility: 12 11 11
Volume: 1,235 247 62
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 5.8% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 bullish on XAU= and have had this outlook for the last 58 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.
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