Gold 1 OZ (XAU=X) buyers are being squelched by firmer global equity markets this week
Gold prices are modestly down in midday U.S. trading Tuesday. Buyers are being squelched by firmer global equity markets this week, including the U.S. stock indexes trading very close to their yearly and all-time highs. The gold and silver markets are in need of a dose of bullish news as the geopolitical front has quieted down recently. December gold futures were last down $1.50 an ounce at 1,486.70. December Comex silver prices were last down $0.132 at $17.475 an ounce.
The recent “collapse in volatility” in the gold market—whereby price action for the past three or four trading sessions has been quieter (smaller daily trading ranges as seen on the daily bar chart)–indicates a significantly bigger price move is very likely to occur at some point soon and quite possibly yet this week.
Asian and European stock indexes were mixed but mostly firmer overnight. U.S. stock indexes were narrowly mixed at midday. A heavy slate of U.S. corporate earnings reports this week is the focus of U.S. stock market traders, amid no fresh geopolitical flare-ups at present.
Trader and investor attitudes worldwide remain generally upbeat early this week and that’s bearish for the precious metals. The U.S.-China trade negotiations appear to be progressing. President Trump said Monday afternoon the talks are “coming along very well,” suggesting a trade agreement between the world’s two largest economies could be signed as early as next month.
The Brexit situation remains in limbo this week, after a hoped-for weekend deal between the U.K. and the European Union fell through. The British Parliament is moving to again delay a vote to seal the Brexit deal. U.K. Prime Minister Boris Johnson wants a resolution to the matter sooner. The uncertainty of the matter is prompting some risk aversion from European traders.
European Union officials have warned five countries about the EU budget constricts not being met, which is also causing some concern among European market watchers.
The key “outside markets” today find Nymex crude oil prices firmer in early U.S. trading today and trading around $53.50 a barrel. Meantime, the U.S. dollar index is slightly up on a mild corrective bounce from recent selling pressure that drove the index to a nine-week low on Monday.
Technically, December gold futures prices were near mid-range at midday today. The bulls have the overall near-term technical advantage but a seven-week-old downtrend is still in place on the daily bar chart. The recent “collapse in volatility” in this market makes me suspect a bigger price move is right on the horizon.
Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,525.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the October low of $1,465.00. First resistance is seen at today’s high of $1,492.10 and then at $1,500.00. First support is seen at today’s low of $1,484.00 and then at last week’s low of $1,478.00.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1,524.11.
The projected lower bound is: 1,450.30.
The projected closing price is: 1,487.20.
A white body occurred (because prices closed higher than they opened).
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 24 white candles and 26 black candles for a net of 2 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 50.1884. This is not an overbought or oversold reading. The last signal was a buy 14 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 46.37. 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 39 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 -80. This is not a topping or bottoming area. The last signal was a buy 14 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 7 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 3.224 at 1,487.474. Volume was 8,900% above average (trending) and Bollinger Bands were 57% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,490.49 1,505.82 1,377.32
Volatility: 8 16 14
Volume: 6,519 1,304 326
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 8.0% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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 29 periods.