Gold 1 OZ (XAU=X) prices could test $1,540/oz next

Gold 1 OZ (XAU=X) prices could test $1,540/oz next

Gold 1 OZ (XAU=X) prices could test $1,540/oz next

Gold prices edged higher on Thursday as the dollar hovered near a six-month low hit on New Year’s Eve amid bets U.S. economic outperformance could be coming to an end.

GMT, after having touched their highest since Sept. 25 at $1,525.20 on Tuesday. Bullion ended 2019 with its biggest annual gain since 2010.

U.S. President Donald Trump said on Tuesday the Phase 1 trade deal with China would be signed on Jan. 15 at the White House, although investors still awaited details of the agreement. “The first phase has been priced in for sometime (in the gold market), but it’s affecting the U.S. dollar, which is weakening quite a bit, and that is supporting gold,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore. The dollar started the New Year under pressure as investors wagered U.S. economic outperformance could be coming to an end as optimism on trade brightens the outlook for growth globally.

1.9% last month, having hit its lowest level since July. A weaker dollar makes gold cheaper for holders of other currencies. Limiting bullion’s advance, Asian shares rose on China’s policy easing and news that the world’s two top economies would sign a trade pact soon. “A key thing to lookout for is stock markets, which have been setting new highs and in case there is some correction, we can see some capital flows into gold,” Lan said. Brexit, Hong Kong protests and North Korea tensions will be the other key factors for the market this year, he said. Investors also took stock of a private survey that showed China’s factory activity expanded at a slower clip last month, but production continued to grow at a solid pace and business confidence shot up. ”(Gold) has continued to demonstrate bullish inclinations as prices breached $1,500 last week despite new highs in the U.S. stock market. Bullish technical posturing will likely support prices as trading activities remain soft for the near term,” Benjamin Lu, analyst at Phillip Futures, said in a note. “A continuation of the positive trend scenario will see gold prices test the next main station of $1,540.”

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1,489.39.

The projected upper bound is: 1,554.00.

The projected lower bound is: 1,503.94.

The projected closing price is: 1,528.97.

Candlesticks

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 28 white candles and 21 black candles for a net of 7 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 76.1721. This is not an overbought or oversold reading. The last signal was a sell 0 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 77.10. 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 91 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 117.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 19 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 24 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 11.576 at 1,528.466. Volume was 8,900% above average (trending) and Bollinger Bands were 51% wider than normal.

Open     High      Low     Close     Volume___
1,517.0351,531.2001,516.9951,528.466 90,612
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,505.98 1,480.45 1,422.67
Volatility: 7 11 14
Volume: 9,061 1,812 453

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 7.4% 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 13 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition.

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