See on the daily bar chart for December Comex gold futures that Monday’s big losses have pushed the yellow metal back into the bottom portion of the recent sideways trading range – after prices hit a seven-week high overnight.
Importantly, no significant chart damage has been inflicted on the daily or the longer-term charts. However, bulls need to defend strong technical support at the September low of $1,851.00. A drop below that price level would inflicted serious near-term chart damage to suggest a new leg down in prices.
This vaccine news is short-term negative for gold, no doubt. However, could it be that as global economies spring back to life in the coming months and we still have a lot of money in the global financial system and probably more stimulus in the near term, that this vaccine news could end up being longer-term bullish for gold?
Could it be that economies will spring back to life faster with the vaccine and thus problematic price inflation becomes even more probable sooner?
Remember that inflation is bullish for raw commodity markets, including the metals.
Don’t rule this scenario out.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1,932.43.
The projected lower bound is: 1,804.47.
The projected closing price is: 1,868.45.
A white body occurred (because prices closed higher 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 28 white candles and 22 black candles for a net of 6 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 34.9702. This is not an overbought or oversold reading. The last signal was a sell 1 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 43.53. 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 65 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 -128.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 1 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 4 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 8.588 at 1,870.448. Volume was 8,900% above average (trending) and Bollinger Bands were 34% narrower than normal.
Open High Low Close Volume 1,861.760 1,874.677 1,859.790 1,870.448 4,498
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1,896.12 1,909.44 1,781.72 Volatility: 34 21 24 Volume: 450 90 22
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 5.0% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term.
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 4 periods.