Gold Threatens To Remain Below Key $1150 Level
MarketPulse | Jul 16, 2015 01:00AM ET
Gold – Thursday, July 16th, 2015
Throughout the last few weeks, gold has steadily declined and fallen from above the key $1200 level back to a new four month low below $1150 in recent hours. Throughout last week, it has enjoyed solid support from the $1150 level, which stopped the sharp falls and allowed it to rally a little higher up to above $1160. During this time, it has rallied higher, but run into resistance at $1160, which has sent it lower again. It now threatens to remain below the key $1150 level. To finish out a couple of weeks ago, it was able to rally against the medium term down trend and move back above the $1170 level, before easing off again. A couple of weeks ago, it surged higher to back above the key $1180 level, before easing lower again. In the few days prior, gold had been easing back to below the key $1200 level, after recently surging higher to a three week high above $1205.
The $1200 level remains significant and is continuing to place selling pressure on gold, and likely the $1180 level now too. Prior to the surge, and in the last few weeks, gold has been content to trade around the key $1180 level. Several weeks ago, it rallied well to move from a two month low near $1160 back up to above $1190 again, before easing back to the $1180 level. The key $1180 level has consistently provided solid support and has held it up now for a couple of months, with the exception of the recent excursion below. About a month 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. Throughout the last month or so, the $1180 level has provided some support and has been called upon recently.
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.
(Daily chart / 4 hourly chart below)
Gold July 16 at 04:10 GMT 1147.2 H: 1149.9 L: 1146.1
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1150 | — | — | 1200 | 1240 | — |
Get The News You Want
During the early hours of the Asian trading session on Thursday, gold is trading in a narrow range just below $1150 after dropping to a new four month low. Current range: trading right above $1145.
Further levels in both directions:
• Below: 1150.
• Above: 1200 and 1240.
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 80%, as gold has dropped below the key $1150 level. The trader sentiment is strongly in favour of long positions.
Economic Releases
- 09:00 EU HICP (Jun)
- 09:00 EU Trade Balance (sa) (May)
- 11:45 EU ECB – Interest Rate
- 12:30 US Initial Claims (11/07/2015)
- 13:30 EU ECB’s Draghi gives press conference following rate announcement
- 14:00 US NAHB Builders survey (Jul)
- 14:00 US Philadelphia Fed Survey (Jul)
- 20:00 US Net Long-term TICS Flows (May)
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.