Gold 1 OZ (XAU=X) pulling back into channel support from long-term resistance

Gold 1 OZ (XAU=X) pulling back into channel support from long-term resistance

Gold 1 OZ (XAU=X) pulling back into channel support from long-term resistance

The long-term resistance zone from around 1522 up to 1575 has indeed proved to be problematic as the recent decline has gold trading at the same levels it was at a month ago. This morning, weakness has brought into play the first line of support to watch.

The rising lower parallel of a channel dating back to the tail-end of May looks to be buyers first opportunity to look for gold to hold. From here a push back higher won’t leave a lot of room, though, before the long-term zone of resistance could become a significant obstacle again.

Instead of a push on through gold may want to correct further either through price retracing and/or time, that is, a move sideways may unfold. A bounce from here that fizzles could build a head-and-shoulders top that leads to a larger corrective move.

This scenario is seen as having a higher than usual chance of occurring because of the resistance zone capping the pattern. But first up is seeing if channel support can at least keep price propped up as it battles as the battle at resistance has yet to resolve. It will be difficult to be outright bullish until those levels from the 2011/12 topping process are cleared.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,528.90.

The projected lower bound is: 1,445.40.

The projected closing price is: 1,487.15.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 3.9776. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 20 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 44.89. 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 sell 9 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 -160.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 3 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 sell 8 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -12.850 at 1,485.800. Volume was 8,900% above average (trending) and Bollinger Bands were 16% narrower than normal.

Open     High      Low     Close     Volume___
1,498.7001,501.0001,483.9001,485.800 50,310
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,522.57 1,469.21 1,342.30
Volatility: 17 18 14
Volume: 5,031 1,006 252

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 10.7% above its 200-period moving average and is in an upward trend. Volatility is high 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 28 periods.

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