Gold 1 OZ (XAU=X) short term momentum has turned negative
Gold prices dropped on Friday in the wake of a stronger than expected US jobs report. Both non-farm payrolls and the unemployment rate beat expectations, while consumer sentiment came in stronger than expected. US yields moved higher following the solid jobs number, and the dollar gained traction paving the way for lower gold prices. China announced today that it would wave some of the soybean tariffs that it imports as a sign of good will.
Gold prices dropped on Friday, pushing through support near the 10-day moving average at 1,464 and testing an upward sloping trend line that comes in near 1,454. Resistance near the 50-day moving average near 1,482. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal reversing the recent rise in the fast stochastic. The fast stochastic reversed lower just above the overbought trigger level. Medium-term momentum is turning neutral as the MACD (moving average convergence divergence) histogram prints in the black with a downward sloping trajectory which points to consolidation.
Jobs Growth Surges
The Labor Department reported on Friday that November non-farm payrolls increase by 266,000 and the unemployment rate fell to 3.5. Those totals easily beat expectations which were for a rise of 187,000 and an unemployment rate that remain unchanged from October’s 3.6%. The decline in November’s jobless rate came amid a corresponding 0.1 percentage point drop in the labor force participation rate, to 63.2%. Average hourly earnings rose by 3.1% from a year ago, while the average workweek held steady at 34.4 hours.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1,487.64.
The projected lower bound is: 1,429.89.
The projected closing price is: 1,458.77.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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 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 54.2059. This is not an overbought or oversold reading. The last signal was a sell 2 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 43.16. 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 72 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 -5. This is not a topping or bottoming area. The last signal was a sell 0 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 5 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -16.096 at 1,459.507. Volume was -0% below average (neutral) and Bollinger Bands were 61% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,464.11 1,481.37 1,404.76
Volatility: 11 12 15
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 3.9% above its 200-period moving average and is in an downward 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 bearish on XAU= and have had this outlook for the last 21 periods.