Gold for Wednesday, October 22, 2014
Over the last few days to finish out last week Gold ran into the previous key level at $1240 which has resisted and forced gold a little lower, however it has since surged higher to a five week high at $1255 in the last 24 hours. 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. Since that time however gold has rallied higher and returned to back above $1230 again before meeting the resistance level at $1240 and then moving higher 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 down to 60% as gold has surged higher to a five week high above $1255. 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.
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 are now distant memories however may play another role 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 $1200.
Gold rose to a one-month high on Tuesday as the dollar edged down slightly and on worries over a slowdown in the global economy after China’s growth eased in the third quarter to its weakest since the 2008/09 financial crisis. Data showed China’s gross domestic product (GDP) grew 7.3 percent between July and September from a year earlier, down from a 7.5 percent in the second quarter, although slightly above the 7.2 percent forecast by analysts. “The retreat of the U.S. dollar from multi-year highs removed the main obstacle for gold,” Commerzbank analyst Carsten Fritsch said. “Weak economic data in the eurozone and China led to concerns that the U.S. economy will not be immune against a slowdown in economic growth, causing a turmoil in wider markets over the past few days.” The dollar was unchanged versus a basket of leading currencies, undermined by a dip in U.S. government bond yields.
Gold October 21 at 23:30 GMT 1249.5 H: 1250.0 L: 1248.3
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1200 | — | — | 1255 | 1290 | — |
During the early hours of the Asian trading session on Wednesday, Gold is remaining quite steady around $1250 after recently easing away from the high around $1255. Current range: trading right around $1250.
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 moved back down to 60% as gold has surged higher to a five week high above $1255. The trader sentiment is strongly in favour of long positions.
Economic Releases
- 21:45 (Tue) NZ CPI (Q3)
- 00:00 AU Internet Skilled Vacancies (Sep)
- 00:30 AU CPI (Q3)
- 08:30 UK BoE MPC minutes released
- 12:30 CA Retail Sales (Aug)
- 12:30 US CPI (Sep)
- 14:00 CA BoC – Overnight Rate