Gold 1 OZ (XAU=X) are edging higher boosted by lower demand for risky assets
Gold futures are edging higher on Tuesday, boosted by lower demand for risky assets. Treasury yields are also trading lower which is pushing down the U.S. Dollar, driving up demand for dollar-denominated gold. Worries over the looming U.S. tariffs on Chinese goods that are supposed to kick in on December 15 is one catalyst underpinning gold. The other is some light position-squaring ahead of the start of the Federal Reserve’s two-day policy meeting later today..
Global Equity Markets Turn Sharply Lower
Gold was flat-lining earlier in the session before posting its turnaround as global equity markets turned sharply lower. As stocks plunged, investors bought Treasurys for protection, driving down interest rates. This move drove the U.S. Dollar lower, while fueling increased demand from foreign buyers.
Treasury Yields Move Lower as Investors Look Ahead to Fed Meeting
U.S. government debt prices were higher Tuesday morning, helped by safe-haven buying and position-squaring ahead of a meeting by the U.S. Federal Reserve.
Later today, the Fed will start a two-day meeting with policymakers expected to keep interest rates unchanged.
Trade Talk Update
China is buying more U.S. soybeans, as both countries try to reach an initial agreement on trade. The move may be seen as an olive branch designed to get the U.S. to rollback its tariffs.
However, according to a report from the South China Morning Post, China and the U.S. are unlikely to reach a trade deal this week.
The report said chances of a deal on that front are falling as the U.S. focuses on finalizing a trade deal with Mexico and Canada. Sources told CNBC on Monday that House Democrats and the Trump administration are close to a tentative deal that would replace North American Free Trade Agreement.
The Morning Post added that additional tariffs on Chinese goods are not expected to take effect. The U.S. had set December 15 as a deadline for both sides to reach a so-called phase one trade deal. If a deal was not reached by then, the U.S. would implement more tariffs targeting China.
Are the tariffs on or off? That is the question. Without an official announcement, investors may still feel the need to move money into the safe-haven Treasurys and Japanese Yen. Additionally, traders are selling U.S. Dollars due to the uncertainty and moving money into gold.
Gold traders are also worried about the Fed. Gold prices could drop sharply on Wednesday if the Fed is more hawkish than expected.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1,490.93.
The projected lower bound is: 1,437.13.
The projected closing price is: 1,464.03.
A white body occurred (because prices closed higher 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 25 white candles and 25 black candles.
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 19.2214. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 46.23. 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 74 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 2 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 7 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 2.426 at 1,464.316. Volume was 8,900% above average (trending) and Bollinger Bands were 64% narrower than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,465.12 1,480.89 1,406.50
Volatility: 10 12 14
Volume: 7,845 1,569 392
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 4.1% above its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 23 periods.
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