GOLD 1 OZ (XAU=X) increasingly in need of supporting fundamentals to carry it higher
To start the week off, gold prices slipped on Monday, ending its three month highs in previous sessions after mounting pressure from a strong US dollar and a return to risk taking assets in the aftermath of the recent global market sell off.
The spot price for gold was down 0.54% to US$1,226.62 per ounce. While US Gold Futures finished at US$1,227.60, sliding a moderate 0.7%.
Despite all the excitement around gold, and the volatility of the global markets that we are currently seeing, gold prices have settle somewhat.
Despite the volatility we have seen in equities (on Monday) if gold is still down so much, it shows you that the flight to safety is not going into gold but the dollar because of the outlook for higher rates.
This comes amid forecasts that higher US interest rates could impact dollar-priced gold, raising the opportunity cost of holding it. As you might expect following a jerky Europe performance, Monday saw gains to the US stock market after sessions closed in global equity markets. Which invited investors to look for safer assets, lifting gold to US$1,243.32, its highest since 17 July on Friday.
The dollar also edged higher against the euro after German Chancellor Angela Merkel said she would not seek re-election as head of her CDU party.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1,224.07.
The projected upper bound is: 1,238.53.
The projected lower bound is: 1,190.19.
The projected closing price is: 1,214.36.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 17.5485. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 9 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 48.49. 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 53 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 -171.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 9 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 0 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -8.610 at 1,213.980. Volume was -0% below average (neutral) and Bollinger Bands were 25% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,226.68 1,206.01 1,270.66
Volatility: 8 13 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 4.5% 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 13 periods.