Gold: Attempts To Remain Above Key $1200 Level
MarketPulse | Apr 13, 2015 12:37AM ET
Gold for Monday, April 13, 2015
Over the last few weeks gold has developed an attraction to the key $1200 level and has traded back and forth around it for most of this time. A couple of weeks ago gold sprung to life surging higher away from the key $1200 level back to a seven week high above $1220 before easing back and finding some support at the key $1200 level to finish out last week. A few weeks ago gold eased a little for a few days to below $1185, although for the best part of the last few weeks gold has moved strongly off the support at $1150 and then found some new support from the $1200 level. It still has its eyes firmly on the key $1200 level and it will be interesting to see whether it can remain above this level and continue to receive support. Prior to the recent move, gold remained quite steady enjoying strong support from the $1150 level whilst some eyes would have been looking lower. The next obvious technical support level lower is around $1130, and if it was to move through this level, then it would be trading at multi-year lows and looking very bearish. When gold broke through the rock solid support level at $1200 recently, it opened itself up to some potential downside which was played out a couple of weeks ago.
Throughout the second half of February gold enjoyed rock solid support from the key $1200 level which held it up on numerous occasions. For about a month gold drifted steadily lower down to a one month low near the key $1200 level before finding the solid support at this key level. At the beginning of December gold eased lower away from the resistance level at $1240 yet again back down to below $1200. During the second half of November gold made repeated runs at the resistance level at $1200 failing every time, before finally breaking through strongly. Throughout the first half of November Gold enjoyed a strong resurgence back to the key $1200 level where it has met stiff resistance up until recently.
Throughout the second half of October gold fell very strongly and resumed the medium term down trend falling from above $1250 back down through the key $1240 level, down below $1200 to a multi year low near $1130. It spent a few days consolidating around $1160 after the strong fall which has allowed it to rally higher in the last couple of weeks. Earlier in October Gold ran into the previous key level at $1240, however it also managed to surge higher to a five week high at $1255. In late August Gold enjoyed a resurgence as it moved strongly higher off the support level at $1275, however it then ran into resistance at $1290. In the week prior, Gold had been falling lower back towards the medium term support level at $1290 however to finish out last week it fell sharply down to the previous key level at $1275.
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Gold futures ended higher on Friday as chart levels were broken, but it was pressured by a stronger dollar and renewed expectations for a U.S. rate hike this year. U.S. gold for June delivery settled up 0.9 percent at $1,204.60 an ounce. Spot gold was last up 1.15 percent to $1,208 an ounce. Flat initially, it gained momentum after a break of technical resistance at $1,196 that triggered automatic buy orders. “This move is coming during a week when we didn’t really have any gold-positive news but …the way gold is putting up a fight at the moment is potentially giving some confidence to the market,” Saxo Bank senior manager Ole Hansen said. “But to make headwinds above the resistance area around $1,225 we need to see some real buying coming in.” Bullion was however still down around 0.3 percent for the week, having pulled back from Monday’s seven-week top of $1,224.10 that was triggered by last week’s weak U.S. employment report.
(Daily chart / 4 hourly chart below)
Gold April 13 at 00:50 GMT 1208.8 H: 1208.9 L: 1206.7
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1200 | 1150 | — | 1240 | 1300 | — |
During the early hours of the Asian trading session on Monday, Gold trades just below $1210. Current range: trading right below $1210.
Further levels in both directions:
• Below: 1200 and 1150.
• Above: 1240 and 1300.
OANDA’s Open Position Ratios
(Shows the ratio of long vs. short positions held for Gold among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The long position ratio for Gold has moved back above 60% as it has eased lower back to below $1200 after its recent surge higher to above $1220. The trader sentiment is in favour of long positions.
Economic Releases
- 23:01 (Sun) UK BRC Retail Sales Monitor (Mar)
- JP BoJ release minutes
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