Gold 1 OZ (XAU=X) Likely to Weaken if Fed is Dovish

Gold 1 OZ (XAU=X) Likely to Weaken if Fed is Dovish

Gold 1 OZ (XAU=X) Likely to Weaken if Fed is Dovish

Gold traders will also be watching Wednesday’s Fed interest rate and monetary policy decisions. A 25-basis point rate cut is widely expected, however, traders will be more interested in how Fed policymakers feel about a December rate cut.

Gold futures finished lower for a third week as rapidly rising U.S. Treasury yields and higher equity markets continued to reduce gold’s appeal as a safe-haven asset. Optimism over improving trade relations between the United States and China after the two economic powerhouses made conciliatory gestures ahead of the resumption of trade talks in early October was one of the catalysts behind the drop in gold prices.

Last week, December Comex gold settled at $1499.50, down $16.00 or -1.06%.

Other catalysts behind the weakness last week were improving U.S. economic data, which dampened the risk of recession in the world’s largest economy and aggressive stimulus from the European Central Bank (ECB) that suggested policymakers may be out of weapons to turn the Euro Zone economy around.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,531.83.

The projected lower bound is: 1,448.62.

The projected closing price is: 1,490.23.

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.

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 21.4950. This is not an overbought or oversold reading. The last signal was a buy 0 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 45.91. 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 12 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 -99. This is not a topping or bottoming area. The last signal was a buy 1 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 11 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -10.250 at 1,488.450. Volume was -0% below average (neutral) and Bollinger Bands were 9% narrower than normal.

Open     High      Low     Close     Volume___
1,498.2001,508.8091,485.2601,488.450 0
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,512.38 1,474.23 1,346.18
Volatility: 18 18 14
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.

Summary

PREC.M.XAU= is currently 10.6% 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 into XAU= (bullish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 2 periods.

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