Gold 1 OZ (XAU=X) Markets Spiked Again

Gold 1 OZ (XAU=X) Markets Spiked Again

Gold 1 OZ (XAU=X) Markets Spiked Again

Gold markets have shot straight up in the air on Tuesday, reaching towards the $17 level. The size of the candle is quite impressive, and it does suggest that perhaps demand for gold is starting to pick up again quite drastically, but one thing that is worth paying attention to is that the $1700 level has offered a massive amount of resistance. By pulling back the way it has, it looks likely that we are going to continue to see the $1700 level respected, at least initially. With that in mind though, it certainly looks as if the markets have made a pretty significant move towards it.

I believe that there are several areas that could come into play for support, not the least of which would be the $1600 level. Alternately, if the market breaks above the $1700 level, then it’s likely that the market goes looking towards the $1750 level, and then eventually the $1800 level. I do like the idea of gold longer term but obviously it’s very difficult to hang on to this type of volatility if you have a huge position. Adding little bits and pieces at the goes along in your favor is the best way to go forward.

All things being equal though, the one thing you should pay attention to is the fact that we have gone straight up in the air like this, and it’s difficult to keep up this type of momentum. That doesn’t necessarily mean that we can’t go forward or higher, but pullbacks are probably going to be necessary. If you can wait on value, you should be rewarded. You certainly can’t jump in with both feet at this point, because you would be “paying up” for the trade.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,673.75.

The projected lower bound is: 1,533.18.

The projected closing price is: 1,603.47.

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 28 white candles and 22 black candles for a net of 6 white 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 85.8670. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 6 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 53.83. 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 3 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 40. This is not a topping or bottoming area. The last signal was a buy 3 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 buy 0 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -7.490 at 1,602.535. Volume was 8,900% above average (trending) and Bollinger Bands were 191% wider than normal.

Open     High      Low     Close     Volume___
1,618.2901,635.7901,598.7001,602.535 13,273
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,536.73 1,585.05 1,506.58
Volatility: 48 28 20
Volume: 1,327 265 66

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 6.4% 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 7 periods.

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