Gold 1 OZ (XAU=X) gains as virus-led economic concerns boost safety buying

Gold 1 OZ (XAU=X) gains as virus-led economic concerns boost safety buying

Gold 1 OZ (XAU=X) gains as virus-led economic concerns boost safety buying

Gold prices firmed on Wednesday as investors sought safe-haven assets after sombre U.S. economic data exacerbated fears of an economic downturn amid increasing global restrictions and lockdowns to combat the coronavirus pandemic.

Spot gold was up 0.9% at $1,585.08 an ounce by 11:02 am EDT (1502 GMT), having earlier risen as much as 1.8%. U.S. gold futures gained 0.3% to $1,601.70.

“The unprecedented macroeconomic backdrop has been drawing more investors to real assets like gold. Central banks across the world are loosening their balance sheets and getting ready for further easing to mitigate the impact of the outbreak,” said Soni Kumari, commodity strategist at ANZ.

“We therefore see real interest rate staying in the deep negative territory for a while… Such a backdrop remains favourable for gold investments.”

The U.S. manufacturing sector contracted in March, with activity hitting its lowest level since 2009, as the coronavirus outbreak caused widespread shortages, a survey showed.

Also, U.S. private payrolls dropped in March for the first time since 2017, supporting economists’ views that the longest employment boom in history ended last month.

As evidence mounted that the pandemic was sending the global economy into a deep recession, equity markets began the new quarter with steep losses. [MKTS/GLOB] [.N]

U.S. President Donald Trump warned Americans on Tuesday of a “painful” two weeks ahead in fighting the coronavirus, with a mounting U.S. death toll that could stretch into the hundreds of thousands even with strict social distancing measures.

The contagion has infected over 851,000 people worldwide and killed 42,053, according to a Reuters tally.

On Tuesday, the U.S. Federal Reserve broadened the ability of dozens of foreign central banks to access dollars during the crisis by allowing them to exchange their holdings of U.S. Treasury securities for overnight dollar loans.

“Technically, the gold bulls still have the overall near-term technical advantage but they are fading this week and need to show fresh power soon,” Kitco Metals senior analyst Jim Wyckoff said in a note.

Resistance lay at around $1,612.40 and then at $1,625, Wyckoff added.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,653.45.

The projected lower bound is: 1,505.46.

The projected closing price is: 1,579.46.

Candlesticks

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 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 38.0466. 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 48.90. 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 8 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 32. This is not a topping or bottoming area. The last signal was a buy 8 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 5 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 7.997 at 1,579.047. Volume was 8,900% above average (trending) and Bollinger Bands were 156% wider than normal.

Open     High      Low     Close     Volume___
1,565.0001,599.6601,564.4501,579.047 65,207
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,576.23 1,589.90 1,511.54
Volatility: 38 30 20
Volume: 6,521 1,304 326

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 4.5% 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 12 periods.

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