Gold for Wednesday, February 11, 2015
To close out last week, gold moved sharply lower back to the key $1240 level and then to a three week low just below $1230. To start this week it has rallied a little higher and spent a couple of days consolidating around the key $1240 level before easing lower in recent hours. It is presently trying to hold onto the $1240 level and seeing what demand enters the market. With the exception of the last few weeks, gold has enjoyed a very solid few weeks to start the year which has seen it surge to a five month high near $1308, before reversing and moving back under $1240 over the last couple of weeks. It presently finds itself trading in a narrow range right around $1240. A few weeks ago gold eased back a little and steadied below the $1280 level after surging to that area and a four month high, before its recent strong surge higher. Over the last month gold has been on the move as it has been able to rally strongly from around $1170 back through the key $1200 level and to a 12 week high just above the $1240 level before its further surge higher a couple of weeks ago. As expected the $1240 level remains key as it has provided plenty of resistance over the last few months and is now playing a role as gold has retreated back to it.
At the beginning of December gold eased lower away from the resistance level at $1240 yet again back down to below $1200. During the second half of November gold made repeated runs at the resistance level at $1200 failing every time, before finally breaking through strongly. Throughout the first half of November Gold enjoyed a strong resurgence back to the key $1200 level where it has met stiff resistance up until recently. 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. 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.
Gold dipped on Tuesday as an uptick in the dollar offset the supportive impact of concerns over Greece’s future in the euro zone and fears over escalating violence in Ukraine, which hurt risk appetite. A 0.1 percent rise in the dollar against its currency basket led gold to stall after the previous day’s rise, preventing a steeper recovery from Friday’s three-week low. Spot gold was down 0.4 percent at $1,234 an ounce, while U.S. gold futures for April delivery were down $9 an ounce also at $1,233. Prices slid to $1,228.25 on Friday after upbeat U.S. jobs data fueled expectations that the Federal Reserve will raise interest rates this year, overriding concerns about the economic health of the euro zone, which lifted prices 8 percent last month. Those concerns are now reasserting themselves, with nervousness over Greece potentially withdrawing from the euro and the conflict in Ukraine weighing on global markets on Tuesday.
(Daily chart / 4 hourly chart below)
Gold February 10 at 22:20 GMT 1233.9 H: 1245.9 L: 1230.9
Gold Technical
S3 | S2 | S1 | R1 | R2 | R3 |
1240 | 1200 | 1170 | 1300 | — | — |
During the early hours of the Asian trading session on Wednesday, Gold is easing lower ever so slightly below the key $1240 level. Current range: trading right below $1240 around $1235.
Further levels in both directions:
• Below: 1240, 1200 and 1170.
• Above: 1300.
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 above 60% as it has eased back a little below $1240. The trader sentiment is in favour of long positions.
Economic Releases
- 21:30 (Tue) NZ BNZ-Business NZ PMI (Jan)
- 23:50 (Tue) JP CGPI (Jan)
- 23:50 (Tue) JP Key Machinery Orders (Dec)
- 00:30 AU Housing & Lending Finance (Dec)
- 19:00 US Budget (Jan)