Shayne Heffernan Gold Report
We are Gold buyers under $1100 today looking for a fast $1250, long term I still see Gold trading much higher.
PREC.M.XAU= closed down -26.890 at 1,106.710. Volume was 8,900% above average (trending) and Bollinger Bands were 28% wider than normal. On 7/20/2015, PREC.M.XAU= closed below the lower band by 29.5%. Although prices have broken the lower band and a downside breakout is possible, the most likely scenario is for the current trading range that PREC.M.XAU= is in to continue.
Open High Low Close Volume___
1,132.9501,132.9501,088.0501,106.710 10,959
Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,148.26 1,180.40 1,200.23
Volatility: 15 14 19
Volume: 1,096 219 55
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.
HEFFX Candlesticks
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 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black 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.
Summary
PREC.M.XAU= is currently 7.8% 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 out of XAU= (bearish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 38 periods.
Our momentum oscillator is currently indicating that XAU= is currently in an oversold condition.
HEFFX 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 18.8492. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 15 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 19.36. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 88 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 -275.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 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 17 period(s) ago.
Shayne Heffernan founded the Heffernan Group of Companies.
Shayne Heffernan Website www.shayneheffernan.com
The Heffernan Group has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world.
The Shayne Heffernan led Knightsbridge Law has become an active financier on Wall St.
Gold’s 4 percent slide in a matter of minutes on Monday came after a record 3.3 million lots of the metal, or about 33 tonnes, were traded on a key Shanghai physical contract, as top consumer China appears to be increasingly shunning bullion.
The selling came as investors have been finding less and less reason to hold gold as a safe haven, with the dollar strengthening ahead of what is expected to be the first increase in U.S. interest rates for nearly a decade.
Spot gold ended a 12-year rally in 2013, after hitting a record high of $1,920 an ounce two years earlier. With the U.S. dollar increasingly gaining favor as a rate hike looms, gold faces still more downside risk.
“It looks like the end of an era for gold,” said Howie Lee, analyst at Phillip Securities in Singapore, saying China has been grappling with oversupply after importing a record volume in 2013.
China said on Friday its gold reserves were up 57 percent at the end of June from the last time it adjusted its reserve figures six years ago. Despite the tonnage increase, gold now accounts for 1.65 percent of China’s total foreign exchange reserves, against 1.8 percent in June 2009.
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Spot gold XAU fell to as low as $1,088.05 an ounce – its weakest since March 2010 – shortly after the Shanghai Gold Exchange opened. Gold regained some ground as the selloff subsided, trading above the key $1,100 support level.
Just over 3 million lots were traded on a key contract XAU9999=SGEX in Shanghai, compared to less than 27,000 lots on Friday, Reuters data showed. Prior to Monday, the volume for July had averaged less than 30,000 lots.”
“We do see a lot of people in China selling gold to get fast cash to go back into the equity market,” said a Singapore-based trader.
The Chinese have snubbed gold in favor of equities for the most part of this year, fuelling a rally in stocks before the meltdown earlier this month and the subsequent recovery.
Monday marked the sixth straight day of decline for gold, which took a hit last week after Federal Reserve Chair Janet Yellen said the U.S. central bank is on course to raise rates this year if the U.S. economy expands as expected.
But the speed and magnitude of Monday’s fall shocked some traders, many of whom had been used to gold’s lethargic trading this year, despite the Greek debt crisis and China’s stock rout.
The Singapore-based trader said stop-loss orders had added to the slump after the Chinese market opened and warned that gold exchange-traded funds were likely to be dumped if the rout persisted.
Holdings at SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, dropped more than 11 tonnes to 696.25 tonnes on Friday.
That outflow was the largest in a single day since 2014, said Victor Thianpiriya, an analyst at ANZ Bank.
“Clearly the market momentum is down. We’ve had a price forecast of $1,100 in the short term, but it looks like the market is certainly trading very much on the weak side and could test levels below $1,100 and stay there for sometime,” Thianpiriya said.
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