Gold Continues To Consolidate Below $1100
MarketPulse | Aug 03, 2015 01:09AM ET
Over the last six weeks or so, gold has steadily declined and fallen from above the key $1200 level back to a new five year low below $1100 a couple of weeks ago. It fell in a 24 hour period through the $1100 level down to the multi-year low near $1070 before rallying back up towards $1100. Since that time it has generally traded in a narrow range between $1090 and $1100. Several weeks ago it enjoyed solid support from the $1150 level which stopped the sharp falls and allowed it to rally a little higher up to above $1160 however this now seems some distance away. During this time it rallied higher but run into resistance at $1160 which has sent it much lower again. Just prior to that it was able to rally against the medium term down trend and move back above the $1170 level before easing off again.
Should it rally back higher in the foreseeable future, then the $1200 level remains significant as it provided ample resistance to higher prices for an extended period. A couple of months ago gold fell sharply back through the key $1200 level and spent the remainder of that week consolidating in a narrow range around $1190. The $1200 level has been a significant level throughout most of this year and remains a key level presently offering reasonable resistance to higher prices, whilst lower the $1180 level continues to be significant. It will be some effort just to get back within reach of the $1200 level after its recent strong falls.
Earlier in May it was able to make a run through the $1200 level to reach a three month high above $1230 however gold was quickly sold off and returned back to the $1200 level where it enjoyed some support for several days. For around two months through April gold traded in a range between $1180 and around $1220 and had very few excursions outside these limits. Gold is currently pinned between resistance at $1200 and support at $1180 and it is surprising to see it trade in such a narrow range for several days. It seems it is waiting patiently for external factors to determine which level will be severely tested next.
Gold August 3 at 00:40 GMT 1094.5 H: 1103.7 L: 1080.1
h3 Gold Technical/h3| S3 | S2 | S1 | R1 | R2 | R3 |
| — | — | — | 1100 | 1200 | 1240 |
During the early hours of the Asian trading session on Monday, gold is trading in a narrow range right around $1095 after recently dropping to a new multi-year low near $1070.
Further levels in both directions:
• Below:
• Above: 1100, 1200 and 1240.
h3 OANDA’s Open Position Ratios/h3
Get The News You Want
(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 to below 65% as gold has dropped sharply to below the $1100 level. The trader sentiment is strongly in favour of long positions.
h3 Economic Releases/h3- 00:30 AU TD-MI Inflation Gauge (Jul)
- 01:30 AU ANZ Job Ads (Jul)
- 08:00 EU Manufacturing PMI (Jul)
- 08:30 UK CIPS/Markit Manufacturing PMI (Jul)
- 12:30 US Core PCE Price Index (Jun)
- 12:30 US Personal Income (Jun)
- 12:30 US Personal Spending (Jun)
- 13:45 US Manufacturing PMI (Jul)
- 14:00 US Construction Spending (Jun)
- 14:00 US ISM Manufacturing (Jul)
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