Gold for Wednesday, April 1, 2015
Despite easing in the last few days to below $1185, 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 turned lower on Tuesday, pressured by the firm U.S. dollar and weak oil prices, and with expectations that the Federal Reserve will increase interest rates this year pushing bullion toward its second monthly decline. Gold has fallen 3 percent since hitting a three-week high last week above $1,200 an ounce after Federal Reserve Chair Janet Yellen on Friday signaled a rate hike could be likely later this year. Yellen’s remarks on sustained gains in the U.S. economy halted a seven-day rally in bullion—the longest rising streak since 2012—which had been spurred by hopes the Fed would take it slow in raising rates.
“Yellen has managed to do a balancing act at the end of the last Fed meeting, on one hand removing the patience language, on the other giving the impression that rates would rise at a more sedate pace than the market initially expected,”
Natixis analyst Nic Brown said.
“Our best case scenario is a June rate hike and in the interim there is certainly scope for more weakness in gold.”
Spot gold was down 0.2 percent at $1,188 an ounce, while U.S. gold for April delivery settled down $1.70 at $1,184.80 an ounce.
(Daily chart / 4 hourly chart below)
Gold March 31 at 23:15 GMT 1183.9 H: 1190.8 L: 1178.5
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1150 | — | — | 1200 | 1240 | 1300 |
During the early hours of the Asian trading session on Wednesday, gold is trading in a narrow range right below $1185 after falling sharply from the key $1200 resistance level. Current range: trading right below $1185.
Further levels in both directions:
• Below: 1150.
• Above: 1200, 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 65% as it eased lower below the key $1200 level. The trader sentiment is in favour of long positions.
Economic Releases
- 01:30 AU Building approvals (Feb)
- 08:00 EU Manufacturing PMI (Mar)
- 08:30 UK CIPS/Markit Manufacturing PMI (Mar)
- 12:15 US ADP Employment Survey (Mar)
- 13:45 US Manufacturing PMI (Mar)
- 14:00 US Construction Spending (Feb)
- 14:00 US ISM Manufacturing (Mar)
- US Vehicle Sales (Mar)