Gold 1 OZ (XAU=X) finding support from a weaker U.S. dollar

Gold 1 OZ (XAU=X) finding support from a weaker U.S. dollar

Gold 1 OZ (XAU=X) finding support from a weaker U.S. dollar

Gold prices climbed on Wednesday, holding ground at their highest since July, finding support from a weaker U.S. dollar ahead of the Federal Reserve’s final monetary policy decision of 2018.

Bullion for February delivery on Comex GCG9, +0.16%  rose $4.90, or 0.4%, to $1,258.50 an ounce, after putting in the highest settlement since July 10 in the previous session, according to FactSet data. Prices, based on the most-active contracts, were again headed for the highest finish since early July and have gained about 2.6% month to date.

The SPDR Gold Shares ETF GLD, -0.35%  also traded 0.4% higher in Wednesday action.

The Federal Open Market Committee’s policy statement and updated projection for future rate increases will be released at 2 p.m. Eastern and that will be followed by a news conference a half-hour later led by Fed Chairman Jerome Powell. Those events occur after a 1:30 p.m. settlement for Comex-traded gold.

Wall Street expects the FOMC to announce a rate increase. However, policy makers will likely indicate that they may be more deliberate about raising borrowing costs further in coming months. A projection of rate expectations by Fed members previously indicated the likelihood for three rate increases in 2019. But an updated plot of rates could reflect a reduced pace of increases next year and the year after.

Overall, the bias in prices is: Upwards

By the way, prices are vulnerable to a correction towards 1,229.05.

The projected upper bound is: 1,265.52.

The projected lower bound is: 1,222.45.

The projected closing price is: 1,243.98.

Candlesticks

A black body occurred (because prices closed lower 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 24 white candles and 26 black candles for a net of 2 black candles.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with PREC.M.XAU=). It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

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 67.5073. This is not an overbought or oversold reading. The last signal was a sell 6 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 57.75. 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 88 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 91. This is not a topping or bottoming area. The last signal was a sell 5 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 12 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -6.280 at 1,243.010. Volume was 8,900% above average (trending) and Bollinger Bands were 4% wider than normal.

Open High Low Close Volume___
1,249.3401,258.0301,242.9501,243.010 15,707

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1,243.64 1,227.52 1,252.53
Volatility: 8 11 12
Volume: 1,571 314 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.

Summary

PREC.M.XAU= is currently 0.8% below 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 into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 9 periods.

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