Gold for Monday, November 24, 2014
Over several days last week Gold made repeated runs at the resistance level at $1200 and failed every time, before finishing the week breaking through ever so slightly. In the last couple of weeks Gold has enjoyed a strong resurgence back to the key $1200 level where it has met stiff resistance. 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.
As to be expected, the key $1200 level is likely to play a role and provide reasonable resistance. 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. 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, around $1320 and $1330. The OANDA long position ratio for Gold has eased back towards 55% as gold has rallied back up to the resistance level at $1200 again.
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 nudged $1,200 an ounce after the Chinese central bank made a surprise policy move and announced it was cutting its benchmark lending and deposit rates and giving banks more freedom. Spot gold was last up $6 $1,197 an ounce. Earlier on Friday morning, gold fell as comments from European Central Bank chief Mario Draghi reignited speculation that the bank will inject more monetary stimulus into the euro zone economy, driving the euro lower against the dollar. Draghi said inflation expectations were dropping to levels he considered excessively low. Gold, which is priced in the dollar andtends to fall when the U.S. unit strengthens, surrendered early gains after his comments. “There is some physical demand underneath the market. Every time we go towards the $1,185-1,180, there seems to be a bit of bargain hunting,” MKS head of trading Afshin Nabavi said. “But gold can’t really get its head above $1,200.”
Gold November 23 at 22:20 GMT 1201.5 H: 1208.1 L: 1186.8
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1140 | — | — | 1200 | 1255 | — |
During the early hours of the Asian trading session on Monday, Gold is trying to stay above the key $1200 level after finishing strongly last week. Current range: trading right above $1200.
Further levels in both directions:
• Below: 1140.
• Above: 1200 and 1255.
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 55% as gold has rallied back up to the resistance level at $1200 again. The trader sentiment is in favour of long positions.
Economic Releases
- 23:50 (Sun) JP CSPI (Aug)
- 09:00 UK Nationwide House Prices (24th-28th) (Nov)
- 11:00 UK CBI Distributive Trades (24th-30th) (Nov)