Gold 1 OZ (XAU=X) Markets Recover After Initial Selloff

Gold 1 OZ (XAU=X) Markets Recover After Initial Selloff

Gold 1 OZ (XAU=X) Markets Recover After Initial Selloff

Gold markets initially pulled back during the trading session on Monday, as there were reports of positivity coming out of the calls between the Americans and the Chinese over the weekend, but since then we have seen a complete turnaround in the rhetoric, and now it suggests that perhaps there is more of a “risk on” type of scenario than originally thought. Regardless though, we found support right where I wanted to see it to validate the fact that we could still be in an uptrend after this significant pullback

The $1450 level was the top of the previous ascending triangle, and that of course is a crucial level that was significantly resistive and is now supportive. At this point, if the market was to turn around and rally from here, it would then target the 50 day EMA, which breaking above there could open up the door to much higher levels.

Quite frankly, I believe that the $1450 level needs to hold more than anything else, and as long as it does there is still the possibility of buying gold on these dips. However, if we were to turn around a break down below that level then the next level that we would test is the 200 day EMA, which breaking down below there would of course be very negative. All things being equal though, it’s probably best looked at as an opportunity for a longer-term set up to the upside. We have in fact seen a bit of a value play as of late, so it does make sense that perhaps we could see this market rally from here.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1,471.09.

The projected upper bound is: 1,501.87.

The projected lower bound is: 1,437.91.

The projected closing price is: 1,469.89.

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 26 white candles and 24 black candles for a net of 2 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.

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 80.9078. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 43.94. 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 59 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 -28. This is not a topping or bottoming area. The last signal was a buy 4 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 down -0.539 at 1,470.200. Volume was 8,900% above average (trending) and Bollinger Bands were 5% wider than normal.

Open     High      Low     Close     Volume___
1,470.8361,471.5651,470.2001,470.200 762
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,467.11 1,491.63 1,395.54
Volatility: 11 14 15
Volume: 76 15 4

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 5.4% above its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 8 periods.

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