Gold 1 OZ (XAU=X) showing signs of stability just above the 200 day EMA

Gold 1 OZ (XAU=X) showing signs of stability just above the 200 day EMA

Gold 1 OZ (XAU=X) showing signs of stability just above the 200 day EMA

Gold markets have suffered as of late, but the last couple of days have been going back and forth in order to perhaps show signs of stability just above the 200 day EMA which of course is a widely followed indicator. That typically defines the trend for a lot of longer-term traders, so of course it will attract a lot of attention. If the market can break above the $1550 level on a daily close, then it’s very likely that we will continue to reach towards the highs. Alternately, if the market were to break down below the $1450 level, then gold will roll over quite significantly.

At this point, the market looks as if it is trying to make a longer-term decision so pay attention to both of those levels as they can tell you where we are going next. Central banks around the world are flooding the markets with money, which should in theory be good for gold, but we are nowhere near an inflationary environment. Gold is probably moving more or less on safety than anything else right now. All things being equal though, until we break out of this range it will probably be a short-term and choppy type of marketplace. That being said, there should be plenty of short-term back-and-forth type of opportunities. Shorter-term stochastic based trading systems will probably do quite well, as well as simple short-term range bound back-and-forth issues. I think overall this is a market that will continue to see a lot of noise, as headlines of course will be highly influential.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 1,542.46.

The projected lower bound is: 1,421.31.

The projected closing price is: 1,481.88.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 25.6067. This is not an overbought or oversold reading. The last signal was a buy 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 31.26. 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 17 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 -125.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 7 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 sell 5 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed down -2.735 at 1,483.265. Volume was 8,900% above average (trending) and Bollinger Bands were 211% wider than normal.

Open     High      Low     Close     Volume___
1,484.9001,487.9951,477.0201,483.265 2,849
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1,575.46 1,584.29 1,502.26
Volatility: 29 24 18
Volume: 285 57 14

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 1.3% below its 200-period moving average and is in an downward 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 out of XAU= (bearish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 3 periods.

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