Gold for Monday, May 11, 2015
To start last week gold enjoyed support at $1180 which allowed it to rally back to $1190 and beyond to resistance at $1200, however it has remained within this range and is presently consolidating around $1190. A couple of weeks ago 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. To start that 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. Over the last couple of months gold has had an attraction to the key $1200 level as every time it ventures away it returns quickly to trade right around it.
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 settled higher on Friday, snapping two days of losses, as revisions to U.S. payrolls data supported speculation that the Federal Reserve may hold off raising interest rates in the immediate future. U.S. job growth rebounded last month and the unemployment rate dropped to a near seven-year low of 5.4 percent, potentially keeping the Federal Reserve on track to hike interest rates this year. However, March payrolls were revised to show only 85,000 jobs created, the smallest number since June 2012. Mixed economic data has pushed earlier expectations for the Federal Reserve to announce a rate rise at its June policy meeting back to later this year. U.S. gold futures for June delivery settled $6.70 lower at $1,188.90 an ounce. Meanwhile, spot gold was up 0.3 percent at $1,188 an ounce. As gold pays no interest, a potential rise in returns from U.S. bonds can weigh on its price.
(Daily chart / 4 hourly chart below)
Gold May 11 at 00:50 GMT 1190.4 H: 1194.1 L: 1181.7
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1180 | 1150 | — | 1200 | 1240 | 1300 |
During the early hours of the Asian trading session on Monday, gold is consolidating around $1190 after its recent rally back towards $1200. Current range: trading right around $1190.
Further levels in both directions:
• Below: 1180 and 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 to below 70% as it has surged back up above $1190. The trader sentiment is strongly in favour of long positions.
Economic Releases
- 01:30 AU NAB Business Conditions & Confidence (Apr)
- 11:00 UK BoE MPC – APF Total (May)
- 11:00 UK BoE MPC – Base Rate
- 11:00 UK BoE Monetary Policy Committee meeting and rate decision