Gold 1 OZ (XAU=X) investors finally have the fundamentals working on all cylinders to fuel a strong rally
It was a long wait, but bullish gold investors finally had the fundamentals working on all cylinders to fuel a strong rally. The move actually started the previous week when aggressive speculative buyers came in at $1274.60 to successfully defend the low of the year at $1273.20.
Several days of consolidation followed as investors watched Treasury yields plunge and stock indexes drop to multi-month lows. Typically, these events are bullish for gold, but gains were being capped by a strong U.S. Dollar Index that was hovering near a two-year high.
The final piece of the bullish puzzle hit on Friday after President Trump vowed to place a tariff on imports from Mexico. The news shook up the financial markets as dire predictions of a recession later in the year crossed traders’ minds. This news coupled with worries over low inflation, a lower than expected Chicago PMI report and a drop in Consumer Sentiment, brought in a wave of buyers as investors increased bets on a central bank rate cut later in the year. The events were bearish for the U.S. Dollar, while increasing foreign demand for dollar-denominated gold.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1,325.73.
The projected lower bound is: 1,284.61.
The projected closing price is: 1,305.17.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 22 white candles and 28 black candles for a net of 6 black 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 84.0039. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 3 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 64.03. 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 70 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 155.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 6 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 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 16.750 at 1,305.250. Volume was -0% below average (neutral) and Bollinger Bands were 26% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,283.01 1,287.45 1,260.62
Volatility: 10 10 11
Volume: 0 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 3.5% above its 200-period moving average and is in an upward trend. Volatility is 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 13 periods.