Gold 1 OZ (XAU=X) Prices Rise as the Dollar Drops

Gold 1 OZ (XAU=X) Prices Rise as the Dollar Drops

Gold 1 OZ (XAU=X) Prices Rise as the Dollar Drops

Gold prices moved higher as the dollar continued to ease, and an Iranian-backed militia tried to storm the US Embassy in the Iraqi capital Tuesday. This comes from an intensifying backlash against the US after it conducted deadly strikes on the group. US short term yields moved lower weighing on the interest rate differential, which put downward pressure on the greenback and paved the way for higher gold prices.

Technical Analysis

Gold prices moved higher pushing through the November highs at 1,516, which is now seen as short-term support. Target resistance is seen near the late September highs at 1,535. Support is seen near the 10-day moving average near 1,495. Additional support is seen near the 50-day moving average at 1,479. The 10-day moving average recently crossed above the 50-day moving average which shows that a short term up trend is now in place. Short term momentum has slowed and now has a neutral trajectory after generating a buy signal and a sell signal. The fast stochastic is printing a reading of 95, well above the overbought trigger level of 80, which could foreshadow a correction.

The RSI (relative strength index) is now printing a reading of 75, rising from 73 which reflects accelerating positive momentum. The RSI is above the overbought trigger level of 70, and also points to a potential future correction. Medium-term momentum is positive as the MACD histogram prints in the black with an upward sloping trajectory which points to higher prices.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1,486.29.

The projected upper bound is: 1,542.41.

The projected lower bound is: 1,492.38.

The projected closing price is: 1,517.39.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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 80.0241. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 15 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 72.82. 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 90 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 102.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 18 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 23 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -0.120 at 1,516.890. Volume was 8,900% above average (trending) and Bollinger Bands were 36% wider than normal.

Open     High      Low     Close     Volume___
1,516.8601,517.0801,516.8001,516.890 28
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,501.04 1,479.95 1,421.58
Volatility: 7 11 14
Volume: 3 1 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.

Summary

PREC.M.XAU= is currently 6.7% above its 200-period moving average and is in an upward trend. Volatility is low 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 12 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition.

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