Gold 1 OZ (XAU=X) bulls continue to be hamstrung by rallying world stock markets
Safe-haven gold prices are moderately down in early U.S. dealings Thursday. The precious metals bulls continue to be hamstrung by rallying world stock markets that saw the U.S. indexes score record highs again overnight. The gold and silver bulls need a fresh dose of geopolitical uncertainty, which is probably just around the corner. December gold futures were last down $8.00 an ounce at 1,485.20. December Comex silver prices were last down $0.058 at $17.54 an ounce.
Asian and European stock indexes were mostly up overnight. U.S. stock indexes are pointed toward higher openings and more record highs when the New York day session begins.
Trader and investor risk appetite remains elevated as the news from the U.S.-China trade front remains very upbeat. Reports from China Thursday said both countries have agreed to remove their tariffs in tranches. The report said tariffs would be eliminated once the “Phase 1” partial trade deal is signed. There has been no official word from the U.S. on this development. While it is a positive, the trade deal still has to be signed. And remember, the trade negotiations between the world’s two largest economies have been a continuously up-and-down affair regarding progress. Given this history it seems unlikely both nations will now just cruise to the finish line with a trade deal.
Technically, the gold bulls still have the overall near-term technical advantage but are fading. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,525.00. Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at the October low of $1,465.00. First resistance is seen at Wednesday’s high of $1,495.90 and then at $1,500.00. First support is seen at this week’s low of $1,480.70 and then at $1,478.00.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1,473.06.
The projected upper bound is: 1,503.44.
The projected lower bound is: 1,430.77.
The projected closing price is: 1,467.10.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black 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 18.2525. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 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 39.21. 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 51 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 -162.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. 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 sell 0 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -22.297 at 1,468.065. Volume was 8,900% above average (trending) and Bollinger Bands were 42% 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: 1,495.77 1,500.56 1,389.49
Volatility: 16 15 15
Volume: 19 4 1
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 5.7% above its 200-period moving average and is in an downward 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 out of XAU= (bearish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 0 periods.
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