Gold 1 OZ (XAU=X) benefiting from expected interest rate cuts in the US and rising geopolitical tensions
The gold price surged above the $1,400/oz level overnight – the first time it has broken that barrier since September 2013 – as demand for the precious metal soars on rising uncertainties.
“Gold has benefited from its safe-haven status amid a deteriorating macroeconomic outlook,” analysts at Melbourne-based ANZ Banking Group said in a report published on Friday.
“We believe it will remain a highly relevant portfolio diversifier, as investors seek protection from growing uncertainties around global economic growth and rising geopolitical risks.”
Prices would probably remain above $1400/oz, and gold had a “reasonable chance” of breaking the $1,500/oz mark over the next 12 months, ANZ said.
Gold has benefited from expected interest rate cuts in the US and rising geopolitical tensions.
Trade spats between the US and its major trading partners are said to be weighing on the global economy, while tensions are lifting in the Middle East.
Following attacks on tanker ships in the region last week, a US drone was shot down allegedly by an Iranian missile on Thursday. According to media reports, US President Donald Trump approved strikes on Iran shortly afterwards, but then backed down on that plan.
Gold touched a high of $1,411.82 overnight, according to Iress data. It gave up some of those gains on Friday morning and was last traded at $1,392.22/oz.
Trump and his Chinese counterpart Xi Jinping are due to meet at the Group of 20 summit next week to discuss trade matters.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 1,318.97.
The projected upper bound is: 1,412.94.
The projected lower bound is: 1,366.59.
The projected closing price is: 1,389.76.
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 26 white candles and 24 black candles for a net of 2 white candles.
A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 82.1120. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 82.11. This is where it usually tops. 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 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 233.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 16 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 0.072 at 1,387.852. Volume was 8,900% above average (trending) and Bollinger Bands were 131% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,349.17 1,300.45 1,271.40
Volatility: 15 11 11
Volume: 987 197 49
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 9.2% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 28 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition.
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