Gold for Wednesday, March 4, 2015
Gold has done well over the last few days to enjoy some support at $1200 and rally higher to a one week high to finish last week, before dropping a little in the last 48 hours and yet again receiving solid support from the $1200 level. For the last month now gold has drifted steadily lower down to a one month low near the key $1200 level before finding solid support at this key level over the last couple of weeks. Earlier last week gold moved back and forth and teased the $1200 level a little however the demand kicked in and brought it right back above the key $1200 level before moving a little higher to close last week. A few weeks ago it rallied higher after dropping through $1220 before running into some resistance around the key $1240 level. The last month or so has now undone some great work earlier in the year which saw it surge to a five month high near $1308, before reversing and moving back to $1200.
It presently finds itself trading in a narrow range right around $1200 where it is experiencing solid support. 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.
Gold settled lower on Tuesday as the dollar eased against a basket of currencies, helping the metal to recover from early losses that briefly pulled it below $1,200 an ounce. U.S. gold for April delivery closed down $3.80, at $1,204.40 an ounce. Spot gold was down 0.3 percent at $1,203 an ounce, having dropped by nearly 1 percent to a session low of $1,194.90 as the dollar hovered around 11-year highs, helped by rising Treasury yields. “Prices … seem to be forming a nice technical base in the low $1,190s,” Deutsche Boerse (XETRA:DB1Gn)’s MNI senior analyst Tony Walters said. “Gold … clearly found some support around $1,200 at the start of this month and people are still looking at U.S. data,” NRC Commodities analyst Andrey Kryuchenkov said. Markets will be watching Friday’s U.S. non-farm payrolls numbers and next week’s launch of outright money-printing by the European Central Bank, he added.
(Daily chart / 4 hourly chart below)
Gold March 3 at 22:20 GMT 1204.3 H: 1214.9 L: 1195.4
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1200 | 1170 | — | 1240 | 1300 | — |
During the early hours of the Asian trading session on Wednesday, Gold is trading in a narrow range below $1205 after easing back from a short surge up to $1220 and more recently bouncing off support at $1205. Current range: trading right around $1204.
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 above 70% as it has dropped sharply back to near $1200. The trader sentiment is in favour of long positions.
Economic Releases
- 00:30 AU GDP (Q4)
- 09:00 EU Composite PMI (Feb)
- 09:00 EU Services PMI (Feb)
- 09:30 UK CIPS/Markit Services PMI (Feb)
- 10:00 EU Retail Trade (Jan)
- 13:15 US ADP Employment Survey (Feb)
- 15:00 CA BoC – Overnight Rate
- 15:00 US ISM Non-Manufacturing (Feb)