Gold for Monday, October 27, 2014
Over the last couple of weeks Gold has ran into the previous key level at $1240, however it also managed to surge higher to a five week high at $1255 early last week. In the last few days to finish last week however it fell strongly back down below the $1240 level and to near $1226 before rallying a little higher. For the last several weeks Gold has enjoyed solid support at $1215 after falling strongly a couple of few ago from $1240 to just below $1215, however a few weeks ago it dropped to its lowest level in 2014 near $1180. It will be interesting to see whether the support level at $1215 can be called upon again and provide some much needed support to gold to stop it falling back down below $1200 again.
The next obvious level of potential support remains at $1200 which is a long term key level, should gold retrace again. Several weeks ago Gold was enjoying 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. During the second half of June, gold steadily moved higher but showed numerous incidents of indecision with its multiple doji candlestick patterns on the daily chart. This happened around $1320 and $1330. The OANDA long position ratio for Gold has moved back to above 65% as gold has fallen back down through the $1240 level.
At the beginning of June, gold did very well to repair some damage and return to the key $1275 level, then it has continued the momentum pushing a higher to its recent four month high. After moving so little for an extended period, gold dropped sharply back in May from above the well established support level at $1275 as it completely shattered this level falling to a four month low around $1240. It remained around support at $1240 for several days before its strong rally higher. It pushed down towards $1280 before sling shotting back and also had an excursion above $1300 for a short period before moving quickly back to the $1293 area again.
Gold fell for a fourth straight session on Monday, edging closer to the key $1,200-an-ounce level as strong global economic data and higher equities curb its safe-haven appeal. Spot gold had eased 0.2 percent to $1,228.61 an ounce by 0032 GMT, after posting a weekly loss on Friday. Gold isn’t too far from a one-week low of $1,226.17 reached last week. The metal’s losses come as global equities posted their biggest weekly percentage gain since July 2013 last week, while the U.S. dollar also strengthened. Data on Friday showed that new U.S. home sales rose to a six-year high and Britain’s economy expanded 0.7 percent in the third quarter. Strong corporate earnings also helped equities higher. Investors are eyeing the Federal Reserve’s policy meeting later this week to gauge the U.S. central bank’s view of the global economy and whether any slowdown in Europe or elsewhere could affect its monetary policy. The Fed is likely to end its monthly bond buying which at one point totaled $85 billion a month.
Gold October 27 at 01:50 GMT 1231.6 H: 1232.2 L: 1227.4
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1200 | — | — | 1255 | 1290 | — |
During the early hours of the Asian trading session on Monday, Gold is rallying back above the $1230 level after starting the week lower. Current range: trading right around $1231.
Further levels in both directions:
• Below: 1200.
• Above: 1255 and 1290.
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 eased back towards 60% as some clients are closing their longs and assessing shorts down to $1200. The trader sentiment is strongly in favour of long positions.
Economic Releases
- 22:50 (Sun) JP Large Retailers Sales (Sep)
- 22:50 (Sun) JP Retail Sales (Sep)
- 07:00 UK Nationwide House Prices (27th-31st) (Oct)
- 09:00 EU M3 Money Supply (sa) (Sep)
- 14:00 US Pending Home Sales (Sep)