Gold for Monday, April 20, 2015
In the last couple of weeks, gold has traded in a narrow range right around the key $1200 level where it presently sits. It seems gold has an attraction to the key $1200 level as every time it ventures away it returns quickly to trade right around it. A few 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. Several weeks ago 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. It still has its eyes firmly on the key $1200 level and it will be interesting to see whether it can remain above this level and continue to receive support. Prior to the recent move, gold remained quite steady enjoying strong support from the $1150 level whilst some eyes would have been looking lower.
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 extended gains on Monday on a softer dollar, despite U.S. data showing an uptick in inflation that could prompt the Federal Reserve to hike rates sooner rather than later. Spot gold ticked up 0.1 percent to $1,205.51 an ounce by 0035 GMT, after gaining 0.6 percent on Friday. Data on Friday showed U.S. consumer prices increased for a second straight month in March on rising gasoline and housing costs, a sign of an uptick in inflation that should keep the Fed on course to start raising interest rates this year. Signs of a possible early hike in interest rates would have typically sent bullion prices lower. As a non-interest-paying asset, gold’s appeal would have been reduced. However, weakness in the dollar provided a boost for gold. The dollar edged lower against a basket of major currencies early on Monday after dropping nearly 2 percent last week as underwhelming U.S. data prompted the market to trim long positions. SPDR (ARCA:GLD) Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.41 percent to 739.07 tons on Friday.
(Daily chart / 4 hourly chart below)
Gold April 20 at 03:30 GMT 1204.8 H: 1206.8 L: 1203.5
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1200 | 1150 | — | 1240 | 1300 | — |
During the early hours of the Asian trading session on Monday, Gold is edging higher ever so slightly back above $1205. Current range: trading right around $1205.
Further levels in both directions:
• Below: 1200 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 below 65% as it has eased lower back to below $1200 after its recent surge higher to above $1220. The trader sentiment is in favour of long positions.
Economic Releases
- There are no significant releases today