Gold for Monday, May 4, 2015
To finish last week gold fell sharply back down through the key $1200 level down to below another support level around $1180, before dropping further to a six week low below $1170. It is now consolidating right around $1180 and enjoying some support there. To start last week gold was trying to rally higher and regain lost ground from the end of the previous week which saw it drop to near $1175. The support at $1180 did well to keep it propped up as it has done again in recent hours. In the last couple of weeks, gold has traded in a narrow range right around the key $1200 level and this range had been getting tighter. gold has had an attraction to the key $1200 level as every time it ventures away it returns quickly to trade right around it. Several weeks ago gold sprung to life surging higher away from the key $1200 level back to a seven week high above $1220 before easing back and finding some support at the key $1200 level. Back at end of March 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.
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 fell to a six-week low on Friday as the dollar strengthened on U.S. economic data and investor sentiment was undermined by longer-term expectations for a U.S. rate rise. Technical factors were also at play, with downward momentum picking up sharply as prices broke through their April low at $1,175 an ounce. Major markets in Europe, China and Singapore were closed for the May Day holiday on Friday, with London to close on Monday. Spot gold last traded more than half a percent lower at $1,175.30 an ounce, after falling 1.2 percent to its lowest since March 20 at $1,170.20. It was on track to close the week down 0.4 percent, its fourth straight week of losses. U.S. gold futures for June delivery settled down 0.7 percent, or $7.90 an ounce at $1,174.50.
(Daily chart / 4 hourly chart below)
Gold May 4 at 01:30 GMT 1178.6 H: 1185.4 L: 1169.9
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1180 | 1150 | — | 1240 | 1300 | — |
During the early hours of the Asian trading session on Monday, gold is consolidating after its recent sharp fall back to the support level around $1180. Current range: trading right below $1180.
Further levels in both directions:
• Below: 1180 and 1150.
• Above: 1240 and 1300.
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 to near 75% as it has fallen sharply back through the key $1200 level to below $1180. The trader sentiment is strongly in favour of long positions.
Economic Releases
- 23:30 (Sun) AU AIG Services PMI (Apr)
- 00:30 AU TD-MI Infl ation Gauge (Apr)
- 01:30 AU ANZ Job Ads (Apr)
- 01:30 AU Building approvals (Mar)
- 08:00 EU Manufacturing PMI (Apr)
- 08:30 EU Sentix Indicator (May)
- 14:00 US Factory Orders (Mar)