Gold 1 OZ (XAU=X) geopolitical concerns have lifted gold’s fundamental appeal as a safe haven asset
After a huge rally at the end of May and the beginning of June, gold prices have settled into an approximate $30 range over the past week. But it’s not just gold prices: volatility has cooled across the board, with bonds, currencies, equities trading in tighter ranges in recent days.
Following the Mexico tariff ceasefire at the end of last week, it feels as if traders are taking a collective sigh of relief ahead of the June Fed meeting next week. Now, with most of the week in the rearview mirror, traders are looking ahead to risks around the corner.
In the month of June, we’ve been carefully watching the gold price rally. Last Wednesday, gold prices moved more than 2% above their daily 21-EMA for just the fifth time since the gold price bottom developed in Q3’19. In the four previous instances, gold prices averaged a 1-week return of -0.49%. As such, at the time it was noted that “the risk for exhaustion setting in again soon and cutting the rally short is increasing.”
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 1,307.00.
The projected upper bound is: 1,363.99.
The projected lower bound is: 1,322.16.
The projected closing price is: 1,343.07.
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 25 white candles and 25 black 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.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 72.8879. This is not an overbought or oversold reading. The last signal was a sell 4 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 71.07. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 4 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 82. This is not a topping or bottoming area. The last signal was a sell 4 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 11 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 0.115 at 1,342.075. Volume was 8,900% above average (trending) and Bollinger Bands were 112% 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: 1,332.61 1,293.90 1,267.26
Volatility: 11 10 11
Volume: 1 0 0
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 5.9% above its 200-period moving average and is in an upward trend. Volatility is low 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 23 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.
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