Gold 1 OZ (XAU=X) Could Be Building Support Base at Long-Term Retracement Zone
Gold futures edged higher on Friday as selling eased in the global equity markets and demand for the U.S. Dollar softened. Despite the small uptick in prices, gold finished lower for the week as investors sold the precious metal to raise cash to meet margin calls in other assets.
Shares in Asia and Europe finished their sessions higher, which gave the major U.S. stock indexes and gold an early boost. Stocks turned lower late in the session after Governor Cuomo placed place New York on ‘pause’ as coronavirus cases soared above 8,500, gold was able to hold on to some of its gains.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1453.00 will signal a resumption of the downtrend with the next targets a pair of main bottoms at $1428.90 and $1413.90.
A move through $1707.80 will change the main trend to up. This is highly unlikely, but there is room to the upside for a normal 50% to 61.8% correction.
The current square the June Comex gold futures contract is working inside is $1238.80 to $1707.80. Its 50% to 61.8% retracement zone is $1473.00 to $1417.50. This zone stopped the selling on March 16 at $1453.00.
The new short-term range is $1707.80 to $1453.00. If there is a technical bounce from the support zone then look for the rally to possibly extend into the short-term retracement zone at $1580.40 to $1610.50.
Technical Indicators
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 1,550.46.
The projected lower bound is: 1,426.88.
The projected closing price is: 1,488.67.
Candlesticks
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
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 26.4276. This is not an overbought or oversold reading. The last signal was a buy 4 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 35.31. 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 1 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 -77. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 7 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -7.804 at 1,489.836. Volume was 8,900% above average (trending) and Bollinger Bands were 227% wider than normal.
Open High Low Close Volume___
1,507.5001,507.8601,485.1761,489.836 8,773
Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,537.52 1,581.57 1,503.73
Volatility: 31 25 18
Volume: 877 175 44
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 0.9% below its 200-period moving average and is in an downward trend. Volatility is high 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 5 periods.
