Gold for Thursday, January 29, 2015
Gold has enjoyed a very solid last few weeks as it has surged to a five month high near $1308, before easing back a little in the last several days remaining above $1280 in the process. To start last week it had just eased back a little and steadied below the $1280 level after surging to that area and a four month high recently. It is now consolidating in a narrow range between $1290 and $1295. In the last few weeks it has been able to rally strongly from around $1170 back through the key $1200 level and to a 12 week high just above the $1240 level before its further surge higher in the last couple of weeks. Despite this recent break, the $1240 level remains key as it has provided plenty of resistance over the last few months and is now likely to play a role should gold retreat back to it.
At the beginning of last month 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 prices were little changed on Wednesday after the Federal Reserve signaled that it would remain patient when it comes raising interest rates. In a statement after its latest policy meeting, the Fed made clear that no rate increase is imminent. Chair Janet Yellen said after last month’s meeting that by saying it would be “patient,” the Fed was signaling there would be no rate increase for at least two meetings. The Fed’s statement Wednesday said the factors holding inflation below its 2 percent target rate have intensified since its last meeting in December. Inflation has stayed ultra-low partly because of a plunge in energy prices and a steadily strengthening dollar. The Federal Open Market Committee is scheduled to release a statement at the end of its two-day policy meeting later on Wednesday and a dovish bias could support a non-interest bearing asset such as gold. ‘The market has more or less priced in a rate hike this year so that is status quo and if the Fed statement surprises … more on the dovish side and rate hike expectations are pushed back into the future, then gold could find some more support,’ Commerzbank analyst Carsten Fritsch said.
(Daily chart / 4 hourly chart below)
Gold January 28 at 22:30 GMT 1283.3 H: 1293.8 L: 1279.7
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1240 | 1200 | 1170 | 1300 | — | — |
During the early hours of the Asian trading session on Thursday, Gold is trading in a narrow range above $1280 and $1285 after easing back from the five month high near $1308. Current range: trading above $1280 around $1285.
Further levels in both directions:
• Below: 1240, 1200 and 1170.
• Above: 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 well above 50% as it has eased back away from the five month high near $1300 in the last few days. The trader sentiment is ever so slightly in favour of long positions.
Economic Releases
- 23:30 (Wed) JP CPI Core (Nation) (Dec)
- 23:30 (Wed) JP CPI Core (Tokyo) (Jan)
- 23:30 (Wed) JP Real Household Spending (Dec)
- 23:30 (Wed) JP Unemployment (Dec)
- 23:50 (Wed) JP Industrial Production (Prelim.) (Dec)
- 00:30 AU Import & Export Price Index (Q4)
- 09:00 EU M3 Money Supply (sa) (Dec)
- 09:00 EU Money Aggregates (Dec)
- 10:00 EU Business Climate Index (Jan)
- 10:00 EU Consumer Sentiment (Jan)
- 10:00 EU Economic Sentiment (Jan)
- 10:00 EU Industrial Sentiment (Jan)
- 13:30 US Initial Claims (24/01/2014)
- 15:00 US Pending Home Sales (Dec)