Gold 1 OZ (XAU=X) price marks highest finish in more than 8 weeks
Gold futures settled above $1,500 an ounce Thursday, marking a third session of gains in a row and the highest finish for the precious metal since the end of October.
Bullish gold investors say bullion has benefited in recent trade on doubts about a China trade deal being completed, concerns about the implications of President Donald Trump’s recent impeachment by the House, and worries about stock market valuations being stretched at least in the U.S.
“Gold and silver are rising on apprehensions over US-China trade deal and Trump and his impeachment proceedings. Physical gold demand is still lagging gold investment demand,” wrote Chintan Karnani, chief market analyst at Insignia Consultants, in a Thursday research note.
Gold for February delivery (GCG20) on Comex added $9.60, or 0.6%, to settle at $1,514.40 an ounce, its highest settlement since Oct. 31, according to FactSet data. On Tuesday, gold rose 1.1% to break above the psychologically important level at $1,500.
March silver (SIH20) tacked on 13.7 cents, or 0.8%, to settle at $17.99 an ounce, its highest settlement since Nov. 4, according to FactSet data. It surged 2% in the previous session.
President Donald Trump has said that a trade deal with China was ready for signing in January and Chinese officials have confirmed that the two sides are in close contact on a partial trade agreement.
However, gold has been viewed as a good way to hedge the possibility of a further breakdown in the back-and-forth talks between China and the U.S., or a disappointment about the details of any pact, market experts say.
“Both American and Chinese officials are saying that a trade deal will be signed soon. Gold and silver will crash only when trade deal is signed and details are released…,” said Karnani.
Meanwhile, Senate Majority Leader Mitch McConnell remains at an impasse with Democrats over the next phase of Trump’s impeachment process, which markets have ignored but which could inject a measure of uncertainty into markets at some point, commodity experts warn.
“High political uncertainty due to continued trade tensions and the approaching U.S. elections should also be supportive [for] Gold in 2020,” wrote a team of Goldman Sachs commodities researchers led by Mikhail Sprogis in a recent client note.
Late-cycle concerns also will likely add to “fear-driven” demand for gold, according to Sprogis, who is forecasting the precious metal to hit $1,600 an ounce in the first quarter and hold there over the next 12 months.
In addition, gold appetite could be supported in the coming weeks as traditional buyers of precious metals scoop up bullion as gifts for holidays like the Lunar New Year.
Gains for gold in recent trade have come even as investors have driven major U.S. stock benchmarks, which tend to move in the opposite direction, to a series of all-time highs. However, gains recently have been tepid as investors brace for trade in a year that could be marked by a change of leadership in the White House and festering Sino-American trade tensions.
In other metals trading, January platinum (PLF20) picked up $10.70, or 1.1%, to trade at $953.50 an ounce. March palladium (PAH20) advanced $16.80, or 0.9%, to end at $1,868.60 an ounce. March copper (HGH20) climbed 0.8% higher at $2.849 a pound on Thursday.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1,536.67.
The projected lower bound is: 1,486.37.
The projected closing price is: 1,511.52.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 7 white candles and 2 black candles for a net of 5 white candles. During the past 50 bars, there have been 27 white candles and 22 black candles for a net of 5 white candles.
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 95.3800. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 11 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 71.13. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 86 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 196.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 14 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 19 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 12.530 at 1,511.130. Volume was 8,900% above average (trending) and Bollinger Bands were 11% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,485.38 1,477.83 1,417.58
Volatility: 7 11 14
Volume: 7,971 1,594 399
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 6.6% 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 8 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition.
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