Gold 1 OZ (XAU=X) price eases as markets assess risks from China virus

Gold 1 OZ (XAU=X) price eases as markets assess risks from China virus

Gold 1 OZ (XAU=X) price eases as markets assess risks from China virus

Gold prices fell on Wednesday, as the dollar firmed and investors assessed the risk of a global epidemic from a coronavirus outbreak from China that could have an impact on economic growth. Spot gold fell 0.3% to $1,553.27 per ounce by 0133 GMT. On Tuesday, prices rose to a near two-week peak before declining as much as 1%. US gold futures were down 0.3% at $1,553.30.

The toll from the Wuhan coronavirus in China rose to six deaths on Tuesday and the first case was reported in the United States, sending markets tumbling on fears of economic damage as tourists canceled travel plans and airports stepped up screening. Investors worried about the threat of contagion as hundreds of millions travel for the Chinese Lunar New Year holidays, which peak over the coming weekend. Weighing on gold, the dollar firmed against a basket of currencies, making gold more expensive for holders of other currencies. Asian stocks steadied although investors remained on edge over the possible consequences of a global pandemic.

US Treasury Secretary Steve Mnuchin said on Tuesday fresh trade deals with China, Mexico and Canada this month could boost the US economy and that growth would outperform projections, including those by the International Monetary Fund. China`s gold consumption fell for the first time in three years in 2019, as high prices and an economic slowdown hit buying in the world`s biggest market for the metal.

Ivory Coast produced a record 32.478 tonnes of gold in 2019, up 35% from 24.06 tonnes in 2018, data from the mine and geology ministry seen by Reuters showed on Tuesday. South African miner Gold Fields Ltd has hired investment bank RBC Capital Markets to explore the sale of a 30% stake in its gold project in northern Chile, two sources said. In other precious metals, palladium dipped 0.7% to $2,386.00 an ounce, silver fell 0.4% to $17.70 per ounce and platinum slipped 0.7% to $992.15.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 1,515.00.

The projected upper bound is: 1,583.19.

The projected lower bound is: 1,536.63.

The projected closing price is: 1,559.91.

Candlesticks

A white body occurred (because prices closed higher 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 30 white candles and 19 black candles for a net of 11 white candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

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 69.1179. 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 64.63. 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 7 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 -11. This is not a topping or bottoming area. The last signal was a sell 9 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 5 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 0.279 at 1,558.009. Volume was 8,900% above average (trending) and Bollinger Bands were 28% wider than normal.

Open     High      Low     Close     Volume___
1,557.7301,559.0501,549.5101,558.009 82,080
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,555.02 1,500.57 1,441.21
Volatility: 8 10 14
Volume: 8,208 1,642 410

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 8.1% 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 out of XAU= (bearish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 27 periods.

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