Gold 1 OZ (XAU=X) Prices Up On Weaker USDX
The gold and silver markets pushed to their daily highs just before midday, at the same time well-known bond trader and fund manager Jeff Gundlach predicted the U.S. dollar would struggle in the coming new year, and that U.S. equities will enter a bear market. That was music to the bullish metals market traders’ ears. The small-cap Russell 2000 stock index has entered bear market territory—down 20% from its high this year.
There were also some commentaries in the press today and over the weekend from well- known traders and analysts, and even President Trump and his advisor, calling for the Fed to back off on interest rate hikes. They are part of a growing chorus of market watchers who think the Fed has raised interest rates far enough, after what many believe what still be another U.S. rate hike this week. This dovish rhetoric is U.S. dollar-bearish and precious metals market bullish.
An eventful trading week does lie ahead. The U.S. Federal Reserve’s Open Market Committee (FOMC) meets Tuesday and Wednesday to discuss monetary policy, while the U.S. government could be shut down at the end of the week if Congress and President Trump cannot agree on a budget plan. Also, the Chinese government holds a big economic meeting this week and could announce major new economic initiatives to stimulate the world’s second-largest economy. China’s central bank made an unexpected injection of money into its financial system on Monday.
Technically, February gold futures bulls have the overall near-term technical advantage. A four-week-old price uptrend is in place on the daily bar chart. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,284.10. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,225.00. First resistance is seen at the December high of $1,256.60 and then at $1,260.00. First support is seen at today’s low of $1,239.40 and then at last week’s low of $1,236.50.
Overall, the bias in prices is: Upwards
By the way, prices are vulnerable to a correction towards 1,228.89.
The projected upper bound is: 1,271.46.
The projected lower bound is: 1,228.73.
The projected closing price is: 1,250.09.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 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 67.0739. This is not an overbought or oversold reading. The last signal was a sell 5 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 63.81. 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 87 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 98. This is not a topping or bottoming area. The last signal was a sell 4 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 11 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 3.080 at 1,248.900. Volume was 8,900% above average (trending) and Bollinger Bands were 4% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,243.05 1,226.54 1,252.94
Volatility: 7 11 12
Volume: 1,515 303 76
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 0.3% below 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 into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 8 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.