Gold prices moved higher on Wednesday and closed at fresh 8-years highs, despite a better than expected United States industrial production report. The dollar moved lower but settled off session lows which paved the way for higher gold prices. United States yields were mixed, as the curve flattened with the 2-year yield moving higher and the 10-year edging lower.
Gold prices closed at session highs and hit a fresh 8-year high. The opening price was near the close that is a sign of indecision. Medium-term momentum is positive to neutral as the MACD (moving average convergence divergence) histogram is printing in the black with a flattening trajectory that points to consolidation. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The present reading on the fast stochastic is 85, above the overbought trigger level of 80 which may indicate a correction.
Industrial Production Rise
Industrial production—rose 5.4% in June month over a month according to the Federal Reserve. That was a bigger increase than the 4% rise anticipated. The index for may was unchanged at 1.4% whereas the index for April was revised down to a 12.7% drop from a 12.5% drop. June’s rebound was led by the manufacturing sector, that posted a 7.2% gain, driven by the production of autos and parts. Mining output decreased 2.9% and utilities output rose 4.2%.
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 1,731.59.
The projected upper bound is: 1,842.55.
The projected lower bound is: 1,772.27.
The projected closing price is: 1,807.41.
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 30 white candles and 20 black candles for a net of 10 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 69.1889. This is not an overbought or oversold reading. The last signal was a sell 4 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 65.89. 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 5 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 77. 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 24 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -5.657 at 1,805.650. Volume was 8,900% above average (trending) and Bollinger Bands were 40% narrower than normal.
Open High Low Close Volume 1,811.296 1,812.990 1,803.800 1,805.650 36,258
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1,799.11 1,745.43 1,607.45 Volatility: 8 13 19 Volume: 3,626 725 181
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 12.3% 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 out of XAU= (bearish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 22 periods.