Gold 1 OZ (XAU=X) Sharply Higher as Dollar Stumbles

Gold 1 OZ (XAU=X) Sharply Higher as Dollar Stumbles

Gold 1 OZ (XAU=X) Sharply Higher as Dollar Stumbles

Chairman Jerome Powell. Traders and investors deemed the Fed’s new stance as more dovish than previously, but not dovish enough to stave off what many believe is an impending global economic slowdown. The gold market did not see a big reaction to the Fed news Thursday, but an overall easier U.S. monetary policy is supportive for the metals markets.

Chinese economic and political officials are holding key meetings late this week, at which major economic initiatives are being discussed and could be announced. China’s economy has been pinched this year by tariffs imposed by the U.S. on China’s imports.

It now appears less likely, but still not out of the question, the U.S. government will shut down Friday, as reports say the Trump administration is likely to come to an agreement with Congress on a budget.

The key outside markets today see the U.S. dollar index solidly lower and hitting a four-week low overnight. The greenback is being hit by the more dovish Federal Reserve and easing tensions in the European Union regarding Italy’s finances, which have supported the Euro currency.

Technically, gold bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the July high of $1,284.10. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,230.00. First resistance is seen at this week’s high of $1,262.20 and then at $1,270.00. First support is seen at $1,250.00 and then at the overnight low of $1,246.20. 

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1,229.73.

The projected upper bound is: 1,281.65.

The projected lower bound is: 1,242.98.

The projected closing price is: 1,262.32.

Candlesticks

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 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 73.1201. This is not an overbought or oversold reading. The last signal was a sell 7 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 67.80. 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 buy 89 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 194.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 13 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 18.550 at 1,261.560. Volume was 8,900% above average (trending) and Bollinger Bands were 18% wider than normal.

Open High Low Close Volume___
1,243.2201,266.4001,242.5101,261.560 18,032

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

Moving Averages: 10-period 50-period 200-period
Close: 1,246.03 1,228.28 1,252.21
Volatility: 11 10 12
Volume: 1,803 361 90

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 0.7% 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 10 periods.

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