Gold 1 OZ (XAU=X) driven by fresh safe haven demand on equity concerns
Gold price gains will likely be driven by fresh safe haven demand on equity concerns, higher financial volatility and economic uncertainty, said HSBC, leading the bank to lift its 2019 average dollar price for the yellow metal to $1,314/oz Tuesday.
“Gold prices are recovering from heavy investor liquidation and losses throughout much of 2018. Recent equity market declines, higher financial market volatility and other risks are triggering renewed investor demand for bullion,” Steel said. “Geopolitical and trade risks, which unusually did not lift gold last year (due to the strong US dollar), also appear to be turning positive. We believe gold is set to move higher in 2019, especially if the global economic outlook remains uncertain.”
Gold has been toying with the $1,300/oz marker so far in 2019, although for now that target has alluded bullion. Gold was spot bid at $1,284/oz as of 1420 GMT Tuesday.
“Our FX view is for a stronger USD, which may present the greatest threat to gold and will at the least limit rallies. Gold is inversely related to US equities, and we believe an important price driver in 2019 will be equity direction and volatility. Recent equity weakness has buoyed gold,” Steel added.
Looking at positioning, Steel noted that COMEX was net short in 2018 for the first time since 2001, which has since been scaled back. “Further short-covering and builds in longs are likely in 2019,” the analyst said.
Industry lobby group the World Gold Council said Tuesday that gold-backed ETFs continued to rally in December against a backdrop of market volatility, marking the third consecutive month of inflows. Global ETFs increased 3%. or by $3.1 billion, driven by North American and European fund activity, WGC said.
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 1,250.43.
The projected upper bound is: 1,306.86.
The projected lower bound is: 1,267.28.
The projected closing price is: 1,287.07.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white 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 45.7157. This is not an overbought or oversold reading. The last signal was a sell 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 67.46. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 60. This is not a topping or bottoming area. The last signal was a sell 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 buy 25 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -2.690 at 1,285.940. Volume was 8,900% above average (trending) and Bollinger Bands were 81% wider 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: 1,282.54 1,240.83 1,249.20
Volatility: 8 10 11
Volume: 1,582 316 79
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 2.9% above its 200-period moving average and is in an upward 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 bullish on XAU= and have had this outlook for the last 22 periods.