Gold for Wednesday, September 10, 2014
After running into resistance at $1290 for several days, gold has fallen sharply over the last week or so, however it has spent the best part of two days consolidating and remaining steady above $1250. In doing so has broken through the support at $1275 on its way down towards the $1250 level and a three month low. It tried to rally higher last week however it ran into further resistance at $1275 before falling lower to a four month low around $1258. A couple of 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. Several weeks ago gold was meeting resistance around $1313 which saw it finally ease lower. Just prior to that it moved well away from the support level at $1290 and back up well above $1300 to a two week high above $1322 before easing lower. It had also been easing lower and placing pressure on the support level at $1300 which eventually gave way resulting in gold falling sharply back down to a six week low near $1280 a few weeks ago. Over the last month or so the $1290 level has shown some signs of support and held gold up until its recent fall. 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 eased back away from 80% as gold has consolidated a little above $1250. 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 settled below $1,250 an ounce on Tuesday, after technical selling sent prices to a three-month low as the US dollar rose and investors worried that the Federal Reserve and other central banks would hike interest rates earlier than expected. Gold's drop and the dollar's rally also weighed heavily on other precious metals, sending silver below $19 and platinum prices to a seven-month low. U.S. gold futures for December delivery closed $5.80 lower at $1,248.50 an ounce. Spot gold was last down 0.5 percent at $1,249 an ounce. The metal closed down 1 percent on Monday, after earlier hitting $1,251.24 - its lowest since June. "Some traders have given up on gold as the $1,250 level represents the line in the sand for many traders. Also, geopolitical risks also appeared to be fading for now," said Phillip Streible, senior commodities broker at RJO Futures in Chicago. The dollar index was near July 2013 highs, boosted by a San Francisco Fed study that noted investors are pricing in a lower trajectory for interest rates rises than members of the central bank are.
Gold September 10 at 01:55 GMT 1255.6 H: 1258.3 L: 1247.5
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1240 | --- | --- | 1290 | 1330 | --- |
During the early hours of the Asian trading session on Wednesday, Gold is remaining quite steady around $1255 after consolidating above $1250 for the last couple of days. Current range: trading right around $1255.
Further levels in both directions:
• Below: 1240.
• 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 eased back away from 80% as gold has consolidated a little above $1250. The trader sentiment is strongly in favour of long positions.
Economic Releases
- 00:30 AU Westpac Consumer Confidence (Sep)
- 12:30 CA Capacity Utilisation (Q2)
- 14:00 US Wholesale Inventories (Jul)
- WLD OPEC Monthly Oil Market Report