Gold 1 OZ (XAU=X) Risk Appetite Recedes
There are renewed worries about slowing global economic growth, as the International Monetary Fund released a report Monday that projected collective world economic growth at 3.5% in 2019, which is down from their last forecast in October for 3.7% growth. The IMF also warned about higher risks for sharper declines in world economic growth.
Meantime, China on Monday reported its economic growth rate in 2018 at 6.6%, which is the lowest level in 29 years.
Germany, the economic driver of the European Union, reported more dour economic data today, with its ZEW economic expectations index weakening in January, along with its current conditions index.
Technically, the gold bulls have the overall near-term technical advantage but are fading. Prices are still in a two-month-old uptrend on the daily bar chart, but just barely. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,260.00. First resistance is seen at $1,285.00 and then at last Friday’s high of $1,292.20. First support is seen at the overnight low of $1,276.00 and then at $1,270.00.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1,303.19.
The projected lower bound is: 1,268.97.
The projected closing price is: 1,286.08.
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 29 white candles and 21 black candles for a net of 8 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with PREC.M.XAU=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
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 22.6798. This is not an overbought or oversold reading. The last signal was a sell 12 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 57.14. 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 8 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 -122.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 12 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 sell 8 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 4.870 at 1,284.400. Volume was 8,900% above average (trending) and Bollinger Bands were 40% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,287.77 1,253.99 1,246.69
Volatility: 8 9 11
Volume: 2,026 405 101
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 3.0% 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 into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 32 periods.