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Tuesday, October 19, 2021

Gold 1 OZ (XAU=X) seeing some renewed demand from traders

Gold 1 OZ (XAU=X) seeing some renewed demand from traders

Gold prices are moderately higher in early U.S. trading Tuesday. The safe-haven metal is seeing some renewed demand from traders and investors as their overall risk appetite is less robust than that which was seen on Monday. August gold futures were last up $5.10 an ounce at 1,394.40. September Comex silver prices were last down $0.068 at $15.12 an ounce.

After having some time to reflect upon the weekend summit meeting on trade between U.S. President Trump and China President Xi, the marketplace is not quite so upbeat on the prospects of a final agreement any time soon. There is speculation now that a deal won’t get done ahead of the 2020 U.S. presidential election. Furthermore, there was some downbeat U.S. manufacturing data released Monday and the Trump administration is again threatening the European Union with trade tariffs.

Asian and European stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. Look for trading activity in the U.S. to start to die down today, ahead of the U.S. Independence Day holiday on Thursday.

Technically, the gold bulls have the overall near-term technical advantage but need to step up and show power this week to keep alive a four-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at the June high of $1,442.90.

Bears’ next near-term downside price breakout objective is pushing August futures prices below solid technical support at $1,363.00. First resistance is seen at $1,400.00 and then at Monday’s high of $1,401.90 and then at $1,408.60. First support is seen at Monday’s low of $1,384.70 and then at $1,380.00.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 1,348.44.

The projected upper bound is: 1,451.53.

The projected lower bound is: 1,390.70.

The projected closing price is: 1,421.12.


A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white 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 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 34.9772. This is not an overbought or oversold reading. The last signal was a sell 3 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 70.29. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 1 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 57. This is not a topping or bottoming area. The last signal was a sell 3 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 23 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 34.130 at 1,418.195. Volume was -0% below average (neutral) and Bollinger Bands were 139% wider than normal.

Open High Low Close Volume___
1,383.1501,419.4701,383.1501,418.195 0

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

Moving Averages: 10-period     50-period     200-period
Close: 1,401.73 1,319.10 1,278.80
Volatility: 24 14 12
Volume: 0 0 0

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 10.9% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 35 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition.

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