Gold 1 OZ (XAU=X) entering a new era of zero interest rate and devaluing currencies
Gold futures gave up earlier gains to end lower on Thursday, pressured as the U.S. dollar strengthened in the wake of a surge in weekly U.S. jobless claims, which underlined the rapid deterioration in the economy from the COVID-19 pandemic.
The U.S. Labor Department on Thursday reported that 5.25 million workers who lost jobs applied for unemployment benefits last week, driving the number of coronavirus-related layoffs above 21 million in just one month.
“U.S. economic data covering the past few weeks is showing just how much damage has been inflicted on U.S. businesses,” said Jim Wyckoff, senior analyst at Kitco.com, in a daily note.
Also on Thursday, U.S. data showed that the Philadelphia Fed manufacturing index in April dropped to -56.6, the lowest reading since July 1980 and builders started construction on new homes at a pace of 1.22 million in March—a 22% decline from a revised 1.56 million in February.
Downbeat data reinforced the perception that the U.S. economy is weakening at an unprecedented clip, likely setting the stage for a slow and long recovery, referred to as U-shaped. Against that backdrop, investors looked to the U.S. dollar as a haven, lifting the ICE U.S. Dollar Index DXY, 0.64% by 0.6% in Thursday dealings.
“The U.S. dollar has been attracting safe haven investment across the globe,” said James Hatzigiannis, chief market strategist at Ploutus Capital Advisors. “The increase of strength in the U.S. dollar drives gold prices down.”
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 1,605.06.
The projected upper bound is: 1,798.47.
The projected lower bound is: 1,642.58.
The projected closing price is: 1,720.52.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 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 72.3604. 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 65.38. 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 19 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 104.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 16 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 1.794 at 1,717.504. Volume was 8,900% above average (trending) and Bollinger Bands were 88% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,682.01 1,613.33 1,526.41
Volatility: 22 31 20
Volume: 7,714 1,543 386
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 12.5% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 8 periods.
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