Gold 1 OZ (XAU=X) Cycles Pointing Lower

Gold 1 OZ (XAU=X) Cycles Pointing Lower

Gold 1 OZ (XAU=X) Cycles Pointing Lower

Metals and miners have been bouncing after forming interim cycle lows. Our work supports a failed rally that should terminate by mid-October. A trade deal with China (partial or otherwise) could trigger the next selloff in gold.

We use cycles to time key turning points in precious metals. The XAU mining index has carried a somewhat consistent 42 to 46-day lineup. The current setup is beginning to favor a bottom in early December.

XAU CYCLE

Prices formed an interim cycle low on the first day of October (day 42). This cycle should fail (left translate) and eventually break the 87.48 pivot. If established, that would support a 6-month low (green boxes) in early December. The severity of the subsequent correction depends on how quickly prices break below the October 87.48 low.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,536.01.

The projected lower bound is: 1,455.92.

The projected closing price is: 1,495.97.

Candlesticks

A white body occurred (because prices closed higher 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 25 white candles and 25 black 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.

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 35.5636. This is not an overbought or oversold reading. The last signal was a buy 7 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 47.96. 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 32 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 -38. This is not a topping or bottoming area. The last signal was a buy 7 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 2 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 1.230 at 1,494.880. Volume was 8,900% above average (trending) and Bollinger Bands were 44% narrower than normal.

Open     High      Low     Close     Volume___
1,494.0601,495.1201,494.0601,494.880 163
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,495.14 1,506.55 1,370.35
Volatility: 16 17 14
Volume: 16 3 1

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 9.1% 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 out of XAU= (bearish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 22 periods.

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