Gold 1 OZ (XAU=X) current levels need to be consolidated before the next leg higher
I remain bullish for gold in the short-term although current levels need to be consolidated before the next leg higher. The fundamental backdrop for the precious remains positive, with the latest boost coming from dovish commentary from NY Fed vice chair John Williams who said that the central bank should stay ahead of the curve especially if the data shows the economy weakening. While these comments were subsequently said to be from academic research, the fact that a major Fed official voiced them gives a clue into the central bank’s thinking. The next FOMC meeting is at the end of July with a 25-basis point now fully priced-in while market odds of a 50bp cut have risen sharply.
Gold has also been in demand from central banks over the past few weeks, China and Russia in particular, who have been diversifying away from the US dollar and the current trend for central banks to weaken their currency to gain competitiveness. With gold priced in US dollars, any weakness in the currency gives a boost to the price of the precious metal. Large swathes of the global bond market also now reside in negative yield territory, weakening currencies further and making fixed income, a traditional risk-off asset class, unattractive for investors.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 1,463.77.
The projected lower bound is: 1,391.62.
The projected closing price is: 1,427.70.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white 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 76.6758. This is not an overbought or oversold reading. The last signal was a sell 0 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 59.67. 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 11 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 151.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 16 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 11 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -21.090 at 1,424.910. Volume was -0% below average (neutral) and Bollinger Bands were 20% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,414.80 1,353.92 1,293.07
Volatility: 19 17 13
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 10.2% above its 200-period moving average and is in an upward 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 bullish on XAU= and have had this outlook for the last 48 periods.
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