GOLD 1 OZ (XAU=X) All that glitters is not gold
Gold’s losses in June, driven by an ascendant dollar, have put the precious metal on course for its biggest monthly drop since November 2016, when markets were roiled by Donald Trump’s victory in the U.S. election.
Gold’s losses in June, driven by an ascendant dollar, have put the precious metal on course for its biggest monthly drop since November 2016, when markets were roiled by Donald Trump’s victory in the U.S. election. The metal dropped 3.6 percent this month, while a gauge of the greenback is up for a third straight month amid escalating global trade tensions.
It’s been a choppy first half. After trading above $1,300 since the start of the year, prices ticked lower in mid-May and went into free fall two weeks ago, erasing the year’s gains. Investors shunned bullion and favored the dollar and Treasuries instead as they weighed the uncertainties surrounding the impact of a U.S.-China trade war on global growth.
The U.S. dollar has been the biggest beneficiary as investors’ first choice safe haven. This has indirectly led to gold-price weakness, as the dollar and gold typically move inversely to each other. With the emergence of inflation, gold is likely to find a bottom, as the dollar’s gains weaken.
Gold futures for August delivery rose 0.3 percent to settle at $1,254.50 an ounce at 1:31 p.m. in New York, helped by a decline in the dollar on Friday.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 1,288.19.
The projected upper bound is: 1,269.42.
The projected lower bound is: 1,231.79.
The projected closing price is: 1,250.60.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with PREC.M.XAU=). It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) 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 14.0976. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 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 26.15. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 110 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 -104.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. 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 9 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 4.370 at 1,252.250. Volume was -0% below average (neutral) and Bollinger Bands were 69% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,263.07 1,295.43 1,303.29
Volatility: 5 9 12
Volume: 0 0 0
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 3.9% below its 200-period moving average and is in an downward 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 into XAU= (bullish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 8 periods. Our momentum oscillator is currently indicating that XAU= is currently in an oversold condition.
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