Gold 1 OZ (XAU=X) slips as U.S., China due to sign trade deal on Wednesday
Gold prices fell 1% on Monday as optimism in equity markets ahead of the signing of an interim U.S.-China trade deal and lack of further escalation in Middle East tensions diminished bullion’s safe-haven appeal. The U.S.-China Phase 1 agreement is due to be signed at the White House on Wednesday.Spot gold dipped 0.7% to $1,551.25 per ounce as of
1101 GMT, having fallen 1% to $1,546.27 earlier in the session.U.S. gold futures fell 0.5% to $1,552.10.
“We are struggling (a) little bit with the details. It’ll be quite interesting to see if there is any concrete guidance in the details of the phase-one deal,” said Julius Baer analyst Carsten Menke. “Also, the news that the Chinese and the U.S. would meet on semi-annual basis to discuss trade, I imagine was something which wasn’t expected by the market, and could be weighing on gold.” A Wall Street Journal report said on Saturday Washington and Beijing had agreed to semi-annual talks aimed at pushing for reforms in both countries and resolving disputes. The positive sentiment ahead of the planned signing boosted global equities, which were hovering just below record levels, while the U.S. dollar gained against key rivals.
Stronger appetite for riskier assets weighs on greenback-denominated gold. Bullion rose to a near 7-year peak of $1,610.90 last week after a U.S. drone strike killed a top Iranian commander in Baghdad and Iran launched missiles against U.S. bases in Iraq in retaliation. The rally, however, faded with a lack of further military escalation in the region. The United States imposed more sanctions on Iran on Friday and vowed to tighten the economic screws if Tehran continued “terrorist” acts or pursued a nuclear bomb. “The tensions between U.S. and Iran seems to have calmed down a little bit, at least for the time being, and people are just taking profits on that,” said Afshin Nabavi, senior vice president at precious metals trader MKS SA. Reflecting investor sentiment, holdings of the world’slargest gold-backed exchange-traded fund, SPDR Gold Trust ,
fell 0.9% to 874.52 tonnes on Friday, their lowest since Sept. 16. On the technical front, gold is testing the support level of $1,550 and a fall below that would be a negative signal, opening space for further declines, Carlo Alberto De Casa, Chief analyst at ActivTrades said in a note. Elsewhere, palladium rose 0.8% to $2,133.34 an ounce. Silver was down 0.7% at $17.97, while platinum fell about 0.7% to $970.79.
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 1,511.74.
The projected upper bound is: 1,576.84.
The projected lower bound is: 1,521.12.
The projected closing price is: 1,548.98.
A black body occurred (because prices closed lower than they opened).
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 20 black candles for a net of 9 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with PREC.M.XAU=). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 24.5042. 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 63.96. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 46. This is not a topping or bottoming area. The last signal was a sell 2 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 31 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -13.833 at 1,548.200. Volume was 8,900% above average (trending) and Bollinger Bands were 116% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,547.21 1,488.34 1,432.05
Volatility: 15 12 14
Volume: 7,384 1,477 369
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 8.1% 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 out of XAU= (bearish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 20 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.