GOLD 1 OZ (XAU=X) speculators remain skeptical about the bullish rebound
Since establishing a low at US$1,160 in August, gold has made a moderate recovery.
Despite the rebound higher in gold price over the past six weeks, speculators remained sceptical about the bullish rebound and continued to bet on the short side. Based on the Commitment of Traders (COT) report, the speculators are excessively short on gold futures, expecting gold to remain in the doldrums.
The short squeeze will then continue until the negative outlook on gold rebalances out. During the December 2015 short squeeze event, gold formed a significant bottom at US$1,058 and staged a strong bull run of 25 per cent over the following eight months.
From a near-term perspective, the US$1,212 range high has been relentlessly keeping a cap on the recovery since late August. For the short sellers to feel the pain, gold needs to break above the US$1,212 range high convincingly to kick-start the short squeeze process. After which, the depressing bearish sentiment since April should be reversed to the bullish side where a significant rally will take over. A retest of the US$1,350 April’s high should be the next target for the bulls.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1,213.05.
The projected lower bound is: 1,168.74.
The projected closing price is: 1,190.90.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 25 white candles and 25 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 21.7228. This is not an overbought or oversold reading. The last signal was a sell 26 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 45.12. 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 30 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 -169.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 5 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 9.270 at 1,191.690. Volume was -0% below average (neutral) and Bollinger Bands were 51% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,197.51 1,202.35 1,281.99
Volatility: 11 12 12
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 7.0% below 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 20 periods.