Gold for Thursday, November 27, 2014
Over several days last week, Gold made repeated runs at the resistance level at $1200 and failed every time, before finishing the week breaking through ever so slightly. For all of this week gold has been trading right around the key $1200 level as it attempts to make a move above and maintain a break. However, it is still struggling with resistance at that level.
In the last few weeks, Gold has enjoyed a strong resurgence back to the key $1200 level where it has met stiff resistance. 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.
As is to be expected, the key $1200 level is likely to play a role and provide reasonable resistance. 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. Still, to finish out last week it fell sharply down to the previous key level at $1275. During the second half of June, gold steadily moved higher but showed numerous incidents of indecision with its multiple doji candlestick patterns on the daily chart, around $1320 and $1330. The OANDA long position ratio for Gold has eased back towards 55% as gold has rallied back up to the resistance level at $1200 again.
At the beginning of June, gold did very well to repair some damage and return to the key $1275 level, then it has continued the momentum pushing a higher to its recent four month high. After moving so little for an extended period, gold dropped sharply back in May from above the well established support level at $1275 as it completely shattered this level falling to a four month low around $1240. It remained around support at $1240 for several days before its strong rally higher. It pushed down towards $1280 before sling shotting back and also had an excursion above $1300 for a short period before moving quickly back to the $1293 area again.
Gold settled modestly lower on Wednesday as recent strong U.S. data fueled talk that the Federal Reserve could soon raise interest rates, depressing gold. Reports released on Wednesday, however, showed domestic personal spending grew slightly less than forecast in October, while U.S. jobless claims rose to their highest since September and new orders for U.S.-made capital goods fell for a second month in October. U.S. gold futures for February delivery ended the session 30 cents lower at $1,197.50 an ounce. Spot gold was last down 0.3 percent at $1,197 an ounce. Spot prices had slipped as low as $1,194.71 before the economic data. “You have to wonder for how much longer U.S. data can have such a big hold on gold,” Macquarie analyst Matthew Turner said. “We have had a lot of ups and downs in U.S. data this year, but the Fed hasn’t actually changed its policy. You’d think at some point these data points would have to get a lot more shocking to have a major impact.”
Gold November 26 at 23:45 GMT 1197.5 H: 1199.1 L: 1196.4
Gold Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1140 | — | — | 1200 | 1255 | — |
During the early hours of the Asian trading session on Thursday, Gold is trying to get back above the key $1200 level after finishing strongly last week. Current range: trading right around $1200.
Further levels in both directions:
• Below: 1140.
• Above: 1200 and 1255.
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 towards the 50% level as gold has steadied just below resistance at $1200. The trader sentiment is in favour of long positions.
Economic Releases
- 23:30 (Wed) JP CPI Core (Nation) (Oct)
- 23:30 (Wed) JP CPI Core (Tokyo) (Nov)
- 23:30 (Wed) JP Real Household Spending (Oct)
- 23:30 (Wed) JP Unemployment (Oct)
- 23:50 (Wed) JP Industrial Production (Prelim.) (Oct)
- 23:50 (Wed) JP Large Retailers Sales (Oct)
- 23:50 (Wed) JP Retail Sales (Oct)
- 00:30 AU Capital Expenditure (Q3)
- 09:00 EU M3 Money Supply (sa) (Oct)
- 10:00 EU Business Climate Index (Nov)
- 10:00 EU Consumer Sentiment (Nov)
- 10:00 EU Economic Sentiment (Nov)
- 10:00 EU Industrial Sentiment (Nov)
- 13:30 CA Current Account (Q3)