Gold 1 OZ (XAU=X) All Signs Point To Higher

Gold 1 OZ (XAU=X) All Signs Point To Higher

Gold 1 OZ (XAU=X) All Signs Point To Higher

Current monetary policies have made the precious metals a more attractive investment option, said Alain Corbani, head of commodities at Finance SA.

“My bet, and so far it has been the safest, is to follow what the Fed is saying. So, basically they are saying ‘we are not going to raise rates anymore,’ they are saying that they don’t see a threat on the inflation front. So, the bottom line is real rates will stay where they are. We are going to have a little more inflation … and twin deficits, high debt-to-GDP. I’ll remind you [that these] are the basic ingredients for gold to perform. [It also] means lower U.S. currency, and higher gold price,” Corbani told Kitco News at the Prospectors & Developers Association of Canada convention in Toronto.

Corbani noted that the environment is “much brighter” today than even three years ago, when the current gold bull cycle started.

On the recent mega mergers activities, Corbani said that the mining industry does not need more consolidation in order for companies to be profitable.

“I think it’s disruptive, and I think it’s destructive, I don’t think that it’s value-driven,” he said.

Corbani’s comments came as Barrick Gold Corp. and Newmont Mining Corp. signed an implementation agreement to create a joint venture in Nevada on Monday, following news that Newmont officially rejected Barrick’s bid to acquire the company.

Barrick’s hostile takeover attempt of Newmont has stirred a divide of opinions in the mining industry, with some analysts commenting that more consolidation in the sector would lead to added shareholder value as administrative overhead decreases, while others, like Corbani, said that mergers are of little significance to investors.

“I don’t care. I don’t know why people want to see more M&A. I don’t,” he said. “Back in 2013, that was the start of a major restructuring of the industry. Did we need M&A to cut costs by $200 an ounce? No. The message was very simple and clear back then. It was, focus on profitability. We don’t need M&A to focus on profitability.”

However, Corbani added that some mergers made financial sense, such as Barrick and Randgold which had complementary assets, and Newmont and Goldcorp, which were just “merging to be more profitable.”

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1,319.07.

The projected lower bound is: 1,274.89.

The projected closing price is: 1,296.98.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 77.9412. This is not an overbought or oversold reading. The last signal was a buy 2 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 45.45. 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 13 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 -42. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 2.691 at 1,296.691. Volume was 8,900% above average (trending) and Bollinger Bands were 54% wider than normal.

Open High Low Close Volume___
1,293.4601,297.3551,291.8101,296.691 10,277

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1,295.99 1,302.82 1,246.55
Volatility: 12 11 11
Volume: 1,028 206 51

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.

Summary

PREC.M.XAU= is currently 4.0% 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 into XAU= (bullish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 6 periods.

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