Gold for Friday, February 20, 2015
Over the course of the last four weeks 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 couple of days. In the last week it rallied higher after dropping through $1220 before running into some resistance around the key $1240 level. With the exception of the last few weeks, gold has enjoyed a very solid few weeks to start the year which has seen it surge to a five month high near $1308, before reversing and moving back to near $1200 over the last few weeks. It presently finds itself trading in a narrow range right around $1210 with eyes on support at $1200. 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.
Spot gold edged lower on Thursday as the dollar rebounded versus the euro and investors assessed the latest standoff over Greece’s bailout. Spot gold, stronger initially, fell 0.5 percent to $1,206 an ounce, erasing gains made after minutes from the U.S. Federal Reserve showed it was still hesitant about raising interest rates. U.S. gold futures for April delivery gained $7.40 an ounce to settle at $1,207.60. Spot prices had fallen to a six-week low of $1,197.56 on Wednesday, when investors saw greater potential for a successful resolution to Greece’s debt talk. Prices bounced back after minutes from January’s Federal Reserve policy meeting showed concern about raising interest rates too soon. On Thursday, the German finance ministry rejected a new proposal from Athens for an extension of its bailout program, saying it fell short of the conditions set out by Greece’s euro zone partners. Even so, Greece’s wording of a document seen by Reuters appeared to go substantially toward the position taken by euro zone finance ministers in early negotiations. That reassured bond investors a deal may not be far away.
(Daily chart / 4 hourly chart below)
Gold February 19 at 23:30 GMT 1208.4 H: 1223.1 L: 1205.5
Gold Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1200 | 1170 | — | 1240 | 1300 | — |
During the early hours of the Asian trading session on Friday, Gold is rallying higher back towards $1210 after receiving support from around $1200. Current range: trading right below $1210.
Further levels in both directions:
• Below: 1200 and 1170.
• 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 below 70% as it has dropped sharply back to near $1200. The trader sentiment is in favour of long positions.
Economic Releases
- 09:00 EU Flash Composite PMI (Feb)
- 09:00 EU Flash Manufacturing PMI (Feb)
- 09:00 EU Flash Services PMI (Feb)
- 09:30 UK Public Borrowing (PSNB ex banks) (Jan)
- 09:30 UK Retail Sales (Jan)
- 13:30 CA Retail Sales (Dec)
- 14:45 US Flash Manufacturing PMI (Feb)