Gold: Surges To Above $1200

Gold for Thursday, April 2, 2015

Gold has sprung to life in the last 24 hours surging higher through the key $1200 level back to a one week high near $1210. It is presently consolidating in a narrow range right below $1205. Just prior to the surge, gold eased a little for a few days to below $1185, although for the best part of the last couple of weeks gold has moved strongly off the support at $1150 up to a three week high right around $1220 level. It eased back to the key $1200 level to finish out last week, before starting this week easing lower again. It still has its eyes firmly on the key $1200 level and it will be interesting to see whether it can remain within reach of this level. 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 rallied 2 percent on Wednesday as the dollar retreated after a downbeat U.S. jobs report raised expectations that the Federal Reserve could be more cautious in tightening monetary policy. The dollar fell 0.2 percent against a basket of currencies, after weaker-than-expected ADP private jobs data raised concerns that Friday’s impending jobs report could also point to worsening conditions in the labor market. “There is so much discord in the U.S. data that is difficult to find what exactly the next report is going to be. It’s the uncertainty that pushes people towards safe-haven assets such as gold,” ING Bank senior strategist Hamza Khan said. Spot gold rose 2.2 percent to a session high of $1,208.90 an ounce, and was trading up 1.8 percent at $1,205. U.S. gold futures for June delivery settled up 2.1 percent at $1,208.20. A strong reading from the U.S. jobs data on Friday could boost bets the Federal Reserve will hike interest rates sooner rather than later, lifting the opportunity cost of holding non-yielding gold. However, a worse-than-expected report could support views that the Fed will hold off any rate hike until next year.

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(Daily chart / 4 hourly chart below)

Gold April 1 at 22:30 GMT 1204.4 H: 1208.7 L: 1180.9

Gold Technical

During the early hours of the Asian trading session on Thursday, Gold is trading in a narrow range right below $1205 after surging sharply through the key $1200 level. Current range: trading right below $1205.

Further levels in both directions:

• Below: 1150.

• Above: 1200, 1240 and 1300.

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