Gold 1 OZ (XAU=X) Grasps at Support

Gold 1 OZ (XAU=X) Grasps at Support

Gold 1 OZ (XAU=X) Grasps at Support

The next couple of weeks bring two highly-awaited Central Bank rate decisions out of Europe and then the US. Both meetings are expected to produce some form of softening and, at this point, there’s likely a portion of that already priced-in to the Euro and the US Dollar. But what else is on the cards for Q4 of this year, that’s what market participants will be looking for around each respective rate decision.

Given the current backdrop, where pretty much all large Central Banks are either in some form of dovish policy or at the very least investigating such, and the setup around Gold remains very interesting. Gold prices have been trending-higher for about a year now, setting a low mid-August of 2018 and continuing to gain ever since. That bullish run hastened in Q4 of last year as expectations around the Fed started to soften, with another major push showing around the June open just as Jerome Powell talked up the prospect of dovish policy.

Eventually, this produced a deep overbought reading with RSI on the weekly chart moving to its highest since 2011, right around the time that the post-GFC run in Gold started to top-out above the 1900 level. Since then, the bullish run has stalled at a key area of resistance, taken from Fibonacci levels at 1509-1527.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,545.43.

The projected lower bound is: 1,458.51.

The projected closing price is: 1,501.97.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 10.2546. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 19 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 48.87. 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 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 -105.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 2 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 sell 7 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -7.040 at 1,499.660. Volume was 8,900% above average (trending) and Bollinger Bands were 22% narrower than normal.

Open     High      Low     Close     Volume___
1,506.8001,515.2001,497.3001,499.660 36,305
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,528.33 1,467.88 1,340.98
Volatility: 18 19 14
Volume: 3,631 726 182

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 11.8% above its 200-period moving average and is in an upward 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 bullish on XAU= and have had this outlook for the last 27 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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