Gold 1 OZ (XAU=X) Markets Continue to Consolidate

Gold 1 OZ (XAU=X) Markets Continue to Consolidate

Gold 1 OZ (XAU=X) Markets Continue to Consolidate

Gold markets gapped higher during the trading session on Monday to kick off the week, turned around to fall below the 200 day EMA and fill that gap again, only to turn around and rally furthermore. That’s not a huge surprise considering that there is so much in the way of risk aversion out there, but the Federal Reserve also got into the game, talking about quantitative easing again and offering to buy corporate bonds. Because of this, it should work against the value of the US dollar longer term but there is still a major US dollar shortage around the world so while I do think that gold could rally, I think the rally is somewhat limited.

Because of this, expect a lot of volatility in short-term trading. However, if the market does close above the $1550 level on a daily close, then it opens up a bigger move. Longer-term, I do believe in the efficacy of the bull market, and it is worth noting that we have just broken above the top of an inverted hammer, which in and of itself is a bullish sign but I see so much in the way of resistance at $1550 that it is going to be a bit difficult. Ultimately, if the market can break above there one would have to think that the next target would be closer to the $1700 level which was the most recent high. The extreme demand for US dollars right now does work against the momentum of any breakout though.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1,628.04.

The projected lower bound is: 1,495.62.

The projected closing price is: 1,561.83.

Candlesticks

A white body occurred (because prices closed higher 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 29 white candles and 21 black candles for a net of 8 white 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 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 73.6156. This is not an overbought or oversold reading. The last signal was a buy 5 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 48.20. 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 2 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 -15. This is not a topping or bottoming area. The last signal was a buy 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 8 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 8.458 at 1,561.523. Volume was 8,900% above average (trending) and Bollinger Bands were 203% wider than normal.

Open     High      Low     Close     Volume___
1,553.3551,564.9711,552.7701,561.523 1,243
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,535.08 1,583.14 1,505.12
Volatility: 42 27 19
Volume: 124 25 6

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 3.7% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 6 periods.

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