Is Gold 1 OZ (XAU=X) Winning the Trade War

Is Gold 1 OZ (XAU=X) Winning the Trade War

Is Gold 1 OZ (XAU=X) Winning the Trade War

The Central Bank of Russia has boosted the share of Chinese currency and gold bullion in its reserves, diversifying from traditional holdings of foreign exchange assets like the US dollar.

Russia is buying more yuan assets than other global central banks. With the buying spree of almost $12 billion in the second half of 2018, the Bank of Russia made the yuan share in its holdings much higher than the global 1.4 percent.

China’s state-owned banks have reportedly been buying US dollars in forwards on behalf of the central bank (PBOC) and immediately selling them on the spot market for yuan to support the domestic currency.

PBOC deputy governor and head of the foreign exchange regulator Pan Gongsheng said China was confident it could keep the yuan basically stable and at a “reasonable” level.

A government central bank buys domestic currency when it wants to strengthen it. By protecting the buying power of domestic currency the country protects its citizens from inflation risks and rising consumer prices.

The government can also weaken domestic currency by selling it on the foreign exchange market. While hurting the domestic consumer, this step helps major export economies, such as China. It makes export goods cheaper to produce at home and, therefore, more competitive on the global market.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1,284.36.

The projected upper bound is: 1,274.57.

The projected lower bound is: 1,236.10.

The projected closing price is: 1,255.33.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

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 49.5094. This is not an overbought or oversold reading. The last signal was a buy 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 37.34. 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 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 -41. This is not a topping or bottoming area. The last signal was a buy 1 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 12 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 4.230 at 1,256.660. Volume was 8,900% above average (trending) and Bollinger Bands were 78% wider than normal.

Open High Low Close Volume___
1,251.6701,260.4301,251.4101,256.660 5,995

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

Moving Averages: 10-period 50-period 200-period
Close: 1,256.14 1,290.90 1,302.55
Volatility: 9 9 11
Volume: 600 120 30

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 3.5% below its 200-period moving average and is in an downward 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 into XAU= (bullish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 11 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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