Gold 1 OZ (XAU=X) traders continue to weigh the spread of coronavirus cases and its potential impact on the global economy
Gold futures eased back from earlier highs on Wednesday, as traders continue to weigh the spread of coronavirus cases and its potential impact on the global economy.
The moves for the metal come ahead of a monetary policy announcement by the U.S. Federal Reserve due out after the day’s futures settlement.
Gold for February delivery (GCG20) on Comex traded at $1,569.50 an ounce, down 30 cents, or 0.02%, while March silver (SIH20) fell 1.8 cents, or 0.1%, to $17.44 an once.
“The sentiment flowing from equities is not definitively ‘risk on’ and psychology remains somewhat on edge due to the virus situation,” analysts at Zaner Metals wrote in a daily note.
“The dollar has forged yet another higher high and has reached the highest level since the beginning of December, and is somewhat limiting of the bull case” for gold, the Zaner analysts said. “On the other hand, risk off markets like [Treasurys]…are tracking higher and gold [exchange-traded fund] holdings yesterday increase for the 5th straight trading session.”
Gold has also struggled to move up on the back of robust earnings, which helped to lift U.S. benchmark stock indexes.
Cases have been confirmed in Taiwan, Germany, Vietnam, Japan, Australia , the U.S., and the United Arab Emirates, but no deaths outside of China have been reported.
“Even if prevailing concerns fade…gold is likely to continue benefitting from supportive central bank policies,” analysts at Zaner Metals said. And looking further ahead, “we expect global slowdown concerns to re-emerge, which should lead to rising volatility in equity markets and, in turn, encourage higher allocations into gold and other precious metals.”
Silver was consolidating after suffering a 3.3% fall on Tuesday.
“Although it is a precious metal with an industrial character, silver had clung firmly to gold’s coattails in the previous days and resisted the weak base metals prices,” said Daniel Briesemann, analyst at Commerzbank. “It has now taken a hit after all, however. Because silver dipped below the technically important 100-day moving average yesterday, the price slide could continue somewhat.”
The Fed will make its latest monetary policy announcement not long after gold futures settle late Wednesday afternoon.
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 1,522.90.
The projected upper bound is: 1,597.96.
The projected lower bound is: 1,548.67.
The projected closing price is: 1,573.31.
A white body occurred (because prices closed higher 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 31 white candles and 18 black candles for a net of 13 white 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 64.1404. This is not an overbought or oversold reading. The last signal was a sell 1 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 63.92. 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 1 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 88. 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 sell 10 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 5.450 at 1,571.310. Volume was 8,900% above average (trending) and Bollinger Bands were 26% narrower 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: 1,563.86 1,510.59 1,448.62
Volatility: 9 10 14
Volume: 5,713 1,143 286
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 8.5% above its 200-period moving average and is in an upward trend. Volatility is 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 32 periods.