Gold 1 OZ (XAU=X) significantly trimmed overnight losses following some downbeat U.S. economic data

Gold 1 OZ (XAU=X) significantly trimmed overnight losses following some downbeat U.S. economic data

Gold 1 OZ (XAU=X) significantly trimmed overnight losses following some downbeat U.S. economic data

Gold and silver prices are modestly lower in early U.S. trading Thursday, but have significantly trimmed overnight losses following some downbeat U.S. economic data that was just released. Still, a muscular U.S. dollar this week is keeping the precious metals market bulls squelched. April gold futures were last down $1.20 an ounce at $1,314.00. March Comex silver was last down $0.067 at $15.585 an ounce.

The just-released U.S. retail sales for December were down 1.2% from November, which was weaker than the expected rise of 0.1%. The reading was the steepest monthly decline in 10 years. The U.S. producer price index report for January showed a fall of 0.1%. A rise of 0.1% was expected. This continues a string of non-problematic inflation data coming from the major world economies. And weekly jobless claims rose by 4,000. All this data plays into the hands of the U.S. monetary policy doves, who want to see the Fed hold off on raising interest rates, and maybe even lower them a bit in 2019.

Technically, the April gold bulls still have the overall near-term technical advantage. Prices are still in a 2.5-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the January high of $1,331.10. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at this week’s high of $1,321.70 and then at last week’s high of $1,323.60. First support is seen at today’s low of $1,304.70 and then at $1,300.00. 

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1,275.83.

The projected upper bound is: 1,333.30.

The projected lower bound is: 1,294.41.

The projected closing price is: 1,313.86.

Candlesticks

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 28 white candles and 22 black candles for a net of 6 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 49.0719. This is not an overbought or oversold reading. The last signal was a sell 8 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 59.62. 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 -32. This is not a topping or bottoming area. The last signal was a sell 8 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 up 6.240 at 1,312.360. Volume was 8,900% above average (trending) and Bollinger Bands were 15% wider than normal.

Open High Low Close Volume___
1,306.0101,314.3601,302.5601,312.360 16,953

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

Moving Averages: 10-period 50-period 200-period
Close: 1,311.20 1,283.12 1,245.45
Volatility: 7 10 11
Volume: 1,695 339 85

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 5.4% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 49 periods.

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