Gold 1 OZ (XAU=X) rallies on slower US growth forecast

Gold 1 OZ (XAU=X) rallies on slower US growth forecast

Gold 1 OZ (XAU=X) rallies on slower US growth forecast

Gold prices moved higher on Tuesday, as the dollar weakened despite rising US yields. The EUR/USD whipsawed higher, despite a mixed ZEW survey which showed that future conditions are expected to get better. The CNBC Fed survey for March shows weaker global growth pointing to tariffs as the impetus for the drop in GDP. Slower growth should weigh on the US dollar and pave the way for higher gold prices.

Technical Analysis

Gold prices rebounded on Tuesday, recapturing resistance which is now support near the 50-day moving average at 1,302. Additional support is seen near the 10-day moving average at 1,298. Target resistance is seen near a downward sloping trend line that comes in near 1,345. Medium term momentum has turned positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal.

This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices. Short term momentum has also turned positive as the fast stochastic regenerated a crossover buy signal. The fast stochastic trajectory is upward pointing to higher prices.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,325.43.

The projected lower bound is: 1,280.68.

The projected closing price is: 1,303.05.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

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 63.7355. This is not an overbought or oversold reading. The last signal was a sell 4 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 49.50. 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 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 76. This is not a topping or bottoming area. The last signal was a buy 8 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 3 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -3.444 at 1,302.856. Volume was 8,900% above average (trending) and Bollinger Bands were 14% wider than normal.

Open High Low Close Volume___
1,305.3601,306.8961,302.0501,302.856 7,950

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

Moving Averages: 10-period 50-period 200-period
Close: 1,299.81 1,304.70 1,246.76
Volatility: 10 11 11
Volume: 795 159 40

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 4.5% above its 200-period moving average and is in an downward 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 bearish on XAU= and have had this outlook for the last 12 periods.

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