GOLD 1 OZ (XAU=X) Increased Appeal as Safe Haven Asset
Gold futures posted a two-sided trade last week before settling marginally lower. The volatility was mostly fueled by the movement in the U.S. Dollar which was driven by U.S. economic data, stock market volatility and reports of a potential trade deal between the United States and China. In the end, it seemed like investors were primarily influenced by the prospect of further rate hikes by the U.S. Federal Reserve as Treasury yields resumed their upward climb.
For the week, December Comex Gold futures settled at $1233.30, down $2.50 or -0.20%.Price of Gold Fundamental Weekly Price Forecast – Democrat Victory Could Spell Doom for Stocks, Increase Gold’s Appeal as Safe Haven Asset
The problem with the gold market at this time is expectations of rising interest rates. Furthermore, traders don’t know if the market is a safe-haven asset or an investment. So I have to conclude, you’re better off watching the direction of the U.S. Dollar then trying to figure out gold’s identity.
There are economic reports this week that could influence gold prices. These include ISM Non-Manufacturing PMI and Producer Inflation.
The U.S. Federal Reserve will also release its latest monetary policy decision on Thursday. It is widely expected to leave its benchmark rate unchanged at 2.25%. However, investors will be more interested in its monetary policy statement which could include commentary on stock market volatility.
The wild card this week is Tuesday’s U.S. Mid-Term Elections. The results are too difficult to predict. All we can say is expect volatility if either party wins.
If the Republicans win then expect Status Quo. Stocks are likely to soar and gold could break. It depends on the direction of the U.S. Dollar because some of the strength in the dollar is being fueled by rising interest rates and some by safe-haven buying.
A win by the Democrats could be chaotic because this will weaken President Trump’s position as leader. Traders may read this as the beginning of the end for the economic recovery. Gold is likely to rally if the Democrats gain control of Congress. Stocks could crash which would increase gold’s appeal as a safe-haven asset.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1,224.29.
The projected upper bound is: 1,256.46.
The projected lower bound is: 1,209.57.
The projected closing price is: 1,233.02.
A black body occurred (because prices closed lower 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 28 white candles and 22 black candles for a net of 6 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 50.1398. 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 58.75. 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 55 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 90. This is not a topping or bottoming area. The last signal was a buy 1 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 2 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -0.320 at 1,232.480. Volume was -0% below average (neutral) and Bollinger Bands were 21% wider 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: 1,228.14 1,207.51 1,269.46
Volatility: 12 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 2.9% below its 200-period moving average and is in an upward trend. Volatility is high 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 15 periods.