Gold 1 OZ (XAU=X) pushing prices below solid technical support at $1,250.00

Gold 1 OZ (XAU=X) pushing prices below solid technical support at $1,250.00

Gold 1 OZ (XAU=X) pushing prices below solid technical support at $1,250.00

Gold prices are trading slightly down in early-morning U.S. trading Monday. The safe-haven metals bulls are perplexed that gold and silver prices have not received a good bid from fresh geopolitical developments that have tanked world stock markets today. June gold futures were last down $1.10 an ounce at $1,280.30. July Comex silver was last down $0.158 at $14.82 an ounce.

World stock markets were rattled and traded sharply lower overnight on news that President Trump tweeted a threat to further increase U.S. trade tariffs on Chinese goods. The sense of the marketplace had been that a U.S.-China trade deal was close and could be finalized late this week. Commodity markets were also roiled overnight on ideas any escalation in the U.S.-China trade war would translate into slower global economic growth. U.S. stock indexes are pointed toward sharply lower openings when the New York day session begins.

As of this writing, the Chinese trade delegation was still headed to the U.S. for talks this week. Upon reflection, many traders and investors realize they should not have become so optimistic on the trade war being resolved, given Turmp’s propensity to make knee-jerk decisions.

Technically, the gold bears have the overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,300.00.

Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at the overnight high of $1,287.40 and then at $1,290.90. First support is seen at $1,275.00 and then at last week’s low of $1,267.30. 

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1,287.92.

The projected upper bound is: 1,300.04.

The projected lower bound is: 1,258.03.

The projected closing price is: 1,279.04.

Candlesticks

A black body occurred (because prices closed lower 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 23 white candles and 27 black candles for a net of 4 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 48.7584. This is not an overbought or oversold reading. The last signal was a buy 9 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 46.20. 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 51 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 69. This is not a topping or bottoming area. The last signal was a buy 1 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 5 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 1.050 at 1,279.990. Volume was 8,900% above average (trending) and Bollinger Bands were 17% narrower than normal.

Open High Low Close Volume___
1,280.8101,285.5101,276.3501,279.990 16,425

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1,277.84 1,294.20 1,252.80
Volatility: 8 10 11
Volume: 1,643 329 82

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 2.2% 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 26 periods.

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