Gold: Support At $1200 Stands Firm

Gold for Monday, February 23, 2015

For the last month now gold has drifted steadily lower down to a one month low near the key $1200 level before finding some support at this key level over the last week. A couple of weeks ago it rallied higher after dropping through $1220 before running into some resistance around the key $1240 level. The last month or so has now undone some great work earlier in the year which saw it surge to a five month high near $1308, before reversing and moving back to $1200. It presently finds itself trading in a narrow range right around $1200 where it is experiencing solid support. A few weeks ago gold eased back a little and steadied below the $1280 level after surging to that area and a four month high, before its recent strong surge higher.

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 fell on Friday after Euro ministers and Greek officials reached an agreement to extend heavily indebted Greece’s financial rescue by four months, officials on both sides told Reuters. An agreement removes the immediate risk of Greece running out of money next month and possibly being forced out of the single currency area. It provides a breathing space for the new leftist-led Athens government to try to negotiate longer-term debt relief with its official creditors. Spot gold, lower flat, was down 0.7 percent to $1,199 an ounce. The metal has lost 1.6 percent so far this week, dipping to its lowest in six weeks at $1,197.56 on Wednesday, when hopes for a successful resolution to Greece’s debt talks boosted investor appetite for risk. U.S. gold futures for April delivery settled down $2.70, a $1,204.90 before the report surfaced. It was down about $8 to $1,199.50 ab ounce in after hour trading.

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(Daily chart / 4 hourly chart below)

Gold February 22 at 22:30 GMT 1201.6 H: 1215.6 L: 1198.2

Gold Technical

During the early hours of the Asian trading session on Monday, Gold is enjoying solid support from the key $1200 level after finishing last week falling sharply. Current range: trading right above $1200.

Further levels in both directions:

• Below: 1200 and 1170.

• Above: 1240 and 1300.

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