Gold 1 OZ (XAU=X) price likely to be determined by trader reaction to the major 50% level at $1293.60

Gold 1 OZ (XAU=X) price likely to be determined by trader reaction to the major 50% level at $1293.60

Gold 1 OZ (XAU=X) price likely to be determined by trader reaction to the major 50% level at $1293.60

Gold futures closed higher last week, confirming the previous week’s closing price reversal bottom. The market was driven higher by a drop in U.S. Treasury yields. This move made the U.S. Dollar a less-desirable investment, while driving up demand for dollar-denominated gold. Helping to put a cap on gold prices was increased demand for higher risk assets.

Last week, April Comex gold settled at $1302.90, up $3.60 or +0.28%.

This week’s price action will likely be driven by the U.S. Dollar’s response to the U.S. Federal Reserve’s interest rate and monetary policy decisions as well as the Federal Open Market Committee’s economic projections. A dovish Fed could drive gold prices sharply higher. The Fed, for example, could reduce the number of potential rate hikes this year.

Bullish Scenario

A sustained move over $1293.60 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a rally into a potential resistance cluster. The first target is a short-term 50% level at $1315.30. This is followed by a downtrending Gann angle at $1317.80, a major Fibonacci level at $1319.70 and a short-term Fibonacci level at $1323.40.

The latter is a potential trigger point for an acceleration to the upside with the next target angle coming in at $1333.80. This is another trigger point for a potential acceleration into a long-term resistance angle at $1344.20. This angle stopped the rally at $1349.80 on February 22.

Bearish Scenario

A failure to hold $1293.60 will signal the presence of sellers. A failure to hold this level could trigger a spike into a long-term uptrending Gann angle at $1281.30, a closing price reversal bottom at $1280.80 and a 50% level at $1279.60. Since the trend is up, buyers could come in on a test of this area.

If $1279.60 fails as support then look for a steep break into the Fibonacci level at $1263.00.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,327.96.

The projected lower bound is: 1,282.67.

The projected closing price is: 1,305.31.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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 53.3504. This is not an overbought or oversold reading. The last signal was a sell 2 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 50.85. 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 17 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 34. This is not a topping or bottoming area. The last signal was a buy 6 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 1 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 3.857 at 1,304.987. Volume was 8,900% above average (trending) and Bollinger Bands were 44% wider than normal.

Open High Low Close Volume___
1,301.3901,305.6441,297.8701,304.987 10,216

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1,296.40 1,304.10 1,246.70
Volatility: 10 11 11
Volume: 1,022 204 51

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 4.7% above its 200-period moving average and is in an downward trend. Volatility is high 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 10 periods.

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