Gold 1 OZ (XAU=X) price barely flinches to impeachment noise, and change is unlikely
The gold price has remained steady throughout the past trading week, with another unusually narrow trading range noted between $1,477 and $1,481 as of time of writing. Unless trading volumes pick up in the lead up to Christmas, it appears that December will be the least volatile month for gold price this year.
It is common to point the finger at seasonality effects to explain why there has been a lack of volatility this time of year, although I don’t think this is the only reason for the reduced market movements.
Investors generally remain uncertain over the trade outlook between US-China, although US Treasury Secretary Steven Mnuchin’s comments on December 19 that both sides will sign the phase one deal early January next year helps showcase that bilateral trade relations are moving in the right direction at least.
Still 2020 is expected to remain dominated by headlines related to trade tensions and prolonged concerns over slowing global growth. These two factors combined earlier contributed to the gold price spiking throughout 2019 by over 15 percent. Gold started the year valued below $1,280 before later peaking above $1,555.
Aside from the persistently bleak global trade outlook that has encouraged the weakest world growth prospects since pre-2010, the US election in late 2020 will also be seen as a massive risk event to the gold price for next year.
Gold might not move too suddenly to election noise for now, but sensitivity should begin to pick up around the end of March – once the Democratic nominee to compete against current US President and Republican Donald Trump is clear.
Arguably, the most interesting developments taking place right now, but also one that investors are not reacting towards, is the breaking story that US President Trump has been impeached by the House of Representatives on the basis of allegedly seeking help from Ukraine to boost his chances of re-election. Trump is the third President in US history to have been impeached, but the probability of him being removed as US President is highly unlikely.
The reason for the low probability of Trump being removed from office as President is correlated to the Senate being controlled by the Republicans.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1,502.29.
The projected lower bound is: 1,453.15.
The projected closing price is: 1,477.72.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 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 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 67.6027. This is not an overbought or oversold reading. The last signal was a buy 7 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 54.12. 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 82 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 88. This is not a topping or bottoming area. The last signal was a sell 10 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 15 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -1.098 at 1,477.950. Volume was -0% below average (neutral) and Bollinger Bands were 48% 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: 1,472.99 1,477.05 1,413.73
Volatility: 5 11 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.
PREC.M.XAU= is currently 4.5% above its 200-period moving average and is in an upward 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 bullish on XAU= and have had this outlook for the last 4 periods.
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