Gold for Wednesday, September 17, 2014
During the few days of this week gold has been able to find some support around $1225 and rally up consolidate just below the resistance level at $1240. To start this week gold reached an eight month low below $1226 after falling heavily over the last few weeks. The next obvious level of potential support is at $1200 which is a long term key level. If gold was to fail at this level, then it is likely the flood gates will open and the shine will have definitely worn off. A few 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. Over the last month or so the $1290 level has shown some signs of support and held gold up until its recent sharp decline. 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 increased a little to back above 75% as gold has settled below $1240. 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. Over the last few weeks gold has eased back from around $1315 to establish its recent narrow trading range below $1295 before its recent slump.
Way back since March, the $1275 level has established itself as a level of support and on several occasions has propped up the price of gold after reasonable falls. Throughout the second half of March gold fell heavily from resistance around $1400 back down to a several week low near support at $1275. Both these levels remain relevant as $1275 continues to offer support and the $1400 level is likely to play a role again should gold move up higher. Through the first couple of months of this year, gold moved very well from a longer term support level around $1200 up towards a six month higher near $1400 before returning to its present trading levels closer to $1300.
Gold was little changed at over $1,230 an ounce on Wednesday as investors were biding their time ahead of a Federal Reserve statement later in the day, keenly watched for clues on when the U.S. central bank will increase interest rates. The metal is only about $10 away from an eight-month low hit earlier this week on fears the Fed would raise rates sooner than expected. Spot gold was flat at $1,234.90 an ounce by 0035 GMT, after closing up 0.2 percent in the previous session. After hitting an eight-month low of $1,225.30 on Monday, the metal has gained slightly as investors adjust their positions ahead of the Fed statement. The Fed opened its two-day meeting on Tuesday, with an announcement scheduled for Wednesday. Some analysts believe it could signal it may begin raising rates sooner than mid-2015, the current consensus target. Any increase in interest rates would dim the appeal of non-interest-bearing assets such as gold, also seen as a hedge against inflation brought by central bank actions.
Gold September 17 at 03:55 GMT 1237.1 H: 1238.4 L: 1233.4
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1200 | --- | --- | 1290 | 1330 | --- |
During the early hours of the Asian trading session on Wednesday, Gold is trading in a small range just below $1240 after consolidating well over the last few days. Current range: trading right around $1237.
Further levels in both directions:
• Below: 1200.
• Above: 1290 and 1330.
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 increased a little to back above 75% as gold has settled below $1240. The trader sentiment is strongly in favour of long positions.
Economic Releases
- 00:30 AU Westpac-MI Leading Index (Aug)
- 08:30 UK Average Earnings (Jul)
- 08:30 UK Claimant Count Change (Aug)
- 08:30 UK Claimant Count Rate (Aug)
- 08:30 UK ILO Unemployment Rate (Jul)
- 09:00 EU HICP - Core (Aug)
- 09:00 EU HICP (Aug)
- 12:30 US CPI (Aug)
- 12:30 US Current Account (Q2)
- 14:00 US NAHB Builders survey (Sep)
- EU ECB Governing Council hold non-rate setting meeting
- UK BoE MPC minutes released