Gold 1 OZ (XAU=X) continues to look vulnerable to the downside in the wake of positive news over U.S.-China trade relations
Gold futures finished a volatile week with a slightly better close, but the precious metal/investment/safe-haven asset, continues to look vulnerable to the downside in the wake of positive news over U.S.-China trade relations late in the week.
Last week’s price action didn’t reveal any surprises. Shorts-covered after the previous week’s steep sell-off when the headlines said trade talks had hit a snag. Short-sellers returned when U.S. officials said a trade deal was close. In between, gold was pressured after the Reserve Bank of New Zealand (RBNZ) surprised the markets again by putting a rate cut on hold. But gold found support a couple of days later when weaker-than-expected Australian employment data suggested the Reserve Bank of Australia (RBA) may lower rates again in December.
Economic data also played a role in gold’s two-sided trade. Helping to keep a lid on prices was stronger-than-expected U.S. consumer and producer inflation. Providing a little boost was mixed U.S. retail sales data.
Federal Reserve Chairman Jerome Powell also dampened the chances of a breakout rally in gold after he said the central bank is unlikely to adjust interest rates anytime soon as long as the economy remains on its present path.
The U.S. stock markets at record highs and positive comments from U.S. officials that progress is being made on the “phase one” trade agreement with China are likely to continue to keep a lid on gold prices and could even drive prices through recent lows.
However, weak global economic data, falling Treasury yields and general uncertainty over the timing of a trade deal could continue to underpin gold prices.
The RBA minutes could provide support if they come across as dovish. However, the Federal Reserve minutes are expected to be hawkish. The ECB policy minutes will be closely watched and could ultimately decide which way the wind blows for gold prices.
Flash PMI data from the Euro Zone and the United States could also influence the price action.
With traders taking protection in the safe-haven Japanese Yen, U.S. Treasury Bonds and gold, and investors aggressively driving U.S. stock markets to record highs, something has to give. Therefore, the longer gold stays in a tight trading range, the greater the chances of a volatile breakout. The direction will be determined by the outcome of the trade deal.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1,471.12.
The projected upper bound is: 1,498.86.
The projected lower bound is: 1,433.79.
The projected closing price is: 1,466.33.
A black body occurred (because prices closed lower 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 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 62.3506. This is not an overbought or oversold reading. The last signal was a buy 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 42.23. 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 57 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 -54. This is not a topping or bottoming area. The last signal was a buy 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 6 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -3.833 at 1,467.117. Volume was -0% below average (neutral) and Bollinger Bands were 2% wider 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: 1,472.34 1,492.50 1,393.94
Volatility: 14 14 15
Volume: 0 0 0
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 5.2% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 6 periods.