Gold 1 OZ (XAU=X) prices idle as FOMC, US jobs data offer divergent drivers
Gold prices struggled for direction last week, torn between competing influences from the FOMC monetary policy announcement and April’s US jobs report. The former sent prices lower as Chair Powell signaled the central bank’s outlook is firmly set at “neutral”, pushing back against recently growing speculation about a rate cut on the horizon. The latter offered a mixed view of the labor market, allowing for a bounce.
While headline payrolls growth registered north of expectations, the jobless rate seemingly fell for the wrong reason as labor force participation shrank and wage inflation printed slower than analysts projected. The markets seemed to focus on the downbeat aspects of the data set, with gold rising as a parallel drop in bond yields and the US Dollar bolstered the relative appeal of non-interest-bearing and anti-fiat assets.
This selective reading probably reflects a built-in desire for retracement before the week-end. The FOMC produced a sizable down move and placed prices squarely at trend support. An unmistakable signal from the jobs data was likely needed to deliver a decisive breakout, especially just ahead of the weekly close. Without such conviction, a correction may have been the de facto default response.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1,288.03.
The projected upper bound is: 1,299.18.
The projected lower bound is: 1,256.93.
The projected closing price is: 1,278.06.
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 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 35.4186. This is not an overbought or oversold reading. The last signal was a buy 8 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 45.39. 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 50 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 -20. This is not a topping or bottoming area. The last signal was a buy 0 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 4 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 8.650 at 1,278.940. Volume was -0% below average (neutral) and Bollinger Bands were 17% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,277.31 1,295.15 1,252.51
Volatility: 8 10 11
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 2.1% above its 200-period moving average and is in an downward 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 bearish on XAU= and have had this outlook for the last 25 periods.