Gold Eases Back Below $1210

Gold for Wednesday, April 8, 2015

Gold has sprung to life in the last couple of days surging higher away from the key $1200 level back to a seven week high above $1220 before easing back and consolidating in a narrow range right around $1210. A couple of 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.

Gold edged lower on Tuesday as the dollar recovered and global shares rose, but uncertainty about the timing of a U.S. interest rate increase kept bullion not far from a seven-week high above $1,200 an ounce. Bullion rose to its highest since Feb. 17 on Monday, supported by a weakening dollar after U.S. non-farm payrolls data fuelled expectations that the Federal Reserve could delay an anticipated rate increase this year. “Bulls are frustrated yet again to see rallies fade … momentum buying is mostly seen as an opportunity to sell into”, bullion broker Sharps Pixley Chief Executive Ross Norman said. Spot gold was down 0.4 percent at $1,210 an ounce, while U.S. gold for June delivery slipped 0.7 percent to settle at $1,210.60 an ounce The dollar rose 0.8 percent versus a basket of major currencies, aided by higher Treasury yields, while European shares also climbed, denting gold’s appeal as an insurance against risk. A stronger greenback makes dollar-denominated bullion more expensive for holders of other currencies, while returns on U.S. bonds are closely watched by the gold market, given that the metal pays no interest.

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(Daily chart / 4 hourly chart below)

Gold April 8 at 00:30 GMT 1209.4 H: 1215.9 L: 1207.6

Gold Technical

During the early hours of the Asian trading session on Wednesday, Gold is trading in a narrow range right around $1210 after surging sharply through the key $1200 level. Current range: trading right around $1210.

Further levels in both directions:

• Below: 1150.

• Above: 1240 and 1300.

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