Gold 1 OZ (XAU=X) Prices Up as COVID-19 Economic Costs Rise

Gold 1 OZ (XAU=X) Prices Up as COVID-19 Economic Costs Rise

Gold 1 OZ (XAU=X) Prices Up as COVID-19 Economic Costs Rise

Gold prices were up in Asia on Thursday as investors continue to calculate the economic damage from the COVID-19 pandemic.

Gold futures were up by 0.33% at $1,745.70 by 9:37 PM ET (2:37 AM GMT) as the yellow metal attempted to claw back its losses from the previous session.

Companies reported dismal numbers during what is turning out to be a difficult earnings season, and the U.S. Commerce Department said retail sales in March plunged a record 8.7%.

Stocks, which usually move in the opposite direction to gold prices, were down in the region on the same day.

The continuous economic turmoil will increase gold’s appeal to investors, as it is viewed as a safe haven.

Commerzbank analyst Carsten Fritsch told CNBC that “the severe impact of the global lockdown on economies and financial markets, the flood of money released by central banks and governments and the ballooning sovereign debt point to ongoing robust demand for gold as a safe haven and last-resort lifeline.”

But Bart Melek, head of commodity strategies at TD Securities, was more cautious as he told CNBC, “Before gold can really take off and have the big macro and central bank policy measures bring it up…there has to be some stability, because anytime there is a need to get cash and liquidity, gold is going to be sideswiped by that.”

Technical Indicators

Overall, the bias in prices is: Upwards

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 1,604.78.

The projected upper bound is: 1,795.58.

The projected lower bound is: 1,639.66.

The projected closing price is: 1,717.62.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 71.3579. 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 64.89. 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 buy 19 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 96. This is not a topping or bottoming area. The last signal was a sell 0 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 16 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -1.056 at 1,714.654. Volume was 8,900% above average (trending) and Bollinger Bands were 88% wider than normal.

Open High Low Close Volume___
1,715.5701,719.0031,711.0001,714.654 23,926
Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,681.72 1,613.28 1,526.40
Volatility: 22 31 20
Volume: 2,393 479 120

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 12.3% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 8 periods.

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