Gold for Tuesday, March 3, 2015
Gold has done well over the last few days to enjoy some support at $1200 and rally higher to a one week high to finish last week, before dropping a little in the last 24 hours and placing its attention firmly back on the support at $1200. For the last month now gold has drifted steadily lower down to a one month low near the key $1200 level before finding solid support at this key level over the last couple of weeks. Earlier last week gold moved back and forth and teased the $1200 level a little however the demand kicked in and brought it right back above the key $1200 level before moving a little higher to close last week. A few weeks ago it rallied higher after dropping through $1220 before running into some resistance around the key $1240 level. The last month or so has now undone some great work earlier in the year which saw it surge to a five month high near $1308, before reversing and moving back to $1200. It presently finds itself trading in a narrow range right around $1200 where it is experiencing solid support. 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.
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 fell on Monday as investors cashed in gains after upbeat Asian demand earlier lifted the metal to two-week highs, with expectations for a rise in U.S. interest rates later this year keeping a lid on prices. Spot gold was at $1,208 an ounce, down 0.4 percent from late on Friday. U.S. gold futures for April delivery were down $5 an ounce at $1,209. Earlier spot prices rose to $1,223.20 an ounce, their highest since Feb. 17, after an interest rate cut in Beijing lifted demand in China, the world’s second largest gold market. “The higher levels we saw were a good opportunity for some of the bears in the market, who are focusing on the fact that the Fed looks to be on course to raise rates, to take some profits,” Societe Generale (PARIS:SOGN) anlayst Robin Bhar said. “We have non-farm payrolls data this week, which always sends markets into a bit of a frenzy. Going by recent evidence, the number is likely to be strong again. That should strengthen the dollar and maybe take some of the attractiveness of gold away.” The dollar was flat against a basket of currencies, but held near an earlier 11-year high, helped by the Chinese rate cut. A strong U.S. non-farm payrolls report on Friday could bolster expectations that the Federal Reserve will press ahead with an interest rate increase sooner rather than later.
(Daily chart / 4 hourly chart below)
Gold March 2 at 22:20 GMT 1206.9 H: 1223.4 L: 1204.7
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1200 | 1170 | — | 1240 | 1300 | — |
During the early hours of the Asian trading session on Tuesday, Gold is trading in a narrow range below $1210 after easing back from a short surge up to $1220 and more recently bouncing off support at $1205. Current range: trading right around $1207.
Further levels in both directions:
• Below: 1200 and 1170.
• Above: 1240 and 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 70% as it has dropped sharply back to near $1200. The trader sentiment is in favour of long positions.
Economic Releases
- 00:30 AU Building approvals (Jan)
- 00:30 AU Current Account (Q4)
- 00:30 AU Net Exports of GDP (Q4)
- 03:30 AU RBA – Overnight Rate
- 09:30 UK CIPS/Markit Construction PMI (Feb)
- 10:00 EU PPI (Jan)
- 13:30 CA GDP (Dec)
- 13:30 CA Industrial product price index (Jan)
- 13:30 CA Raw Materials Price Index (Jan)
- 15:00 US IBD Consumer Optimism (Mar)
- AU RBA holds interest rate meeting
- US Vehicle Sales (Feb)