Gold 1 OZ (XAU=X) climbs to over 7-year high on coronavirus-led economic worries

Gold 1 OZ (XAU=X) climbs to over 7-year high on coronavirus-led economic worries

Gold 1 OZ (XAU=X) climbs to over 7-year high on coronavirus-led economic worries

A slump in China’s exports is expected to have extended into March while a collapse in oil price likely deepened a decline in imports, a Reuters poll showed, as the virus cripples the global economy and overall demand.

The U.S. Congress struggled to produce a fresh coronavirus relief bill on Monday, as a stubborn standoff between Republicans and Democrats complicated the challenge of passing legislation with most lawmakers out of town.

  • A steep economic downturn and massive rescue spending will nearly quadruple the fiscal 2020 U.S. budget deficit to a record $3.8 trillion, a staggering 18.7% of U.S. economic output, a Washington-based watchdog group said on Monday.
  • Seven Northeastern U.S. states and three on the West Coast formed regional pacts on Monday aimed at coordinating a gradual reopening of their economies without a resurgence of coronavirus infections just as the outbreak appeared to be starting to wane.
  • The International Monetary Fund on Monday said it would provide immediate debt relief to 25 member countries under its Catastrophe Containment and Relief Trust to allow them to focus more financial resources on fighting the pandemic.

The death toll from COVID-19 in British hospitals rose to 11,329 on Monday and the government, which is having to operate without its convalescing leader Boris Johnson, signalled that there would be no easing of lockdown measures this week.

SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.56% to 1,009.70 tonnes on Monday. [GOL/ETF]

Palladium gained 1% to $2,210.57 per ounce, while silver eased 0.6% to $15.35 and platinum slipped 0.2% to $747.08 an ounce. DATA/EVENTS (GMT) 0630 India WPI Inflation YY.

Technical Indicators

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 1,592.21.

The projected upper bound is: 1,797.06.

The projected lower bound is: 1,641.84.

The projected closing price is: 1,719.45.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 92.1571. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 66.70. 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 buy 17 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 150.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 14 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 2.101 at 1,716.171. Volume was 8,900% above average (trending) and Bollinger Bands were 128% wider than normal.

Open     High      Low     Close     Volume___
1,712.0901,722.2001,710.9501,716.171 8,374
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,657.83 1,606.90 1,523.30
Volatility: 20 31 20
Volume: 837 167 42

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.

Summary

PREC.M.XAU= is currently 12.7% above its 200-period moving average and is in an upward 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 bullish on XAU= and have had this outlook for the last 6 periods.

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