Gold 1 OZ (XAU=X) ECB slashed its 2019 growth and inflation forecasts and lowered those for 2020
Gold edged lower overnight, holding near a multi-week low as the US dollar gained against the euro after the European Central Bank postponed an interest rate hike, but the bank’s gloomy economic outlook limited the metal’s fall.
Spot gold was down 0.1 per cent at $US1,285.61 per ounce.
US gold futures settled down 0.1 per cent at $US1,286.1 per ounce.
The ECB slashed its 2019 growth and inflation forecasts and lowered those for 2020 and 2021 on Thursday, acknowledging that Europe’s slowdown was longer and deeper than earlier thought.
“The good news here for gold is that the interest rate environment globally is unlikely to move much higher,” said Bart Melek, head of commodity strategies at TD Securities in Toronto, with reference to the ECB statement.
“We do have reason to believe the US dollar will be firm for now and that historically tends to suppress gold prices. But at these levels, gold is still very supported at $US1,275 and $US1,285.”
Germany, the euro zone’s biggest economy, stagnated in the fourth quarter and Italy is in outright recession, raising the risk that a temporary slowdown will become a more lasting downturn as business confidence is sapped by a steady flow of negative news.
The ECB announcement compounded worries of a global slowdown, helping bolster the overall sentiment for bullion, considered a safe store of value during times of economic or political uncertainty.
“Gold is behaving in a relatively lacklustre form. We have got the US jobs data tomorrow which might give us a good indication of what to expect from here,” said Ross Norman, chief executive at Sharps Pixley.
Also supporting gold was strong buying from central banks, analysts said, with China, the world’s biggest consumer of the metal, increasing its gold reserves to 60.260 million fine troy ounces in February from 59.940 million troy ounces at end-January.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1,307.05.
The projected lower bound is: 1,264.05.
The projected closing price is: 1,285.55.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white 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 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 12.9537. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 10 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 36.47. 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 10 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 -109.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 10 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 7 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -1.015 at 1,285.345. Volume was 8,900% above average (trending) and Bollinger Bands were 47% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,305.44 1,301.95 1,246.52
Volatility: 10 10 11
Volume: 1,919 384 96
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 3.1% above 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 out of XAU= (bearish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 3 periods.
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