Gold for Thursday, May 14, 2015
In the start of this new week, gold traded in a very narrow range right around $1190, being supported from the $1180 area; however, it has surged to a one month high just shy of $1220 in the last 24 hours. To start last week, gold enjoyed support at $1180, which allowed it to rally back to $1190 and beyond to resistance at $1200. However, it has remained within this range and is presently consolidating around $1190. A couple of weeks ago, gold fell sharply back down through the key $1200 level down to below another support level around $1180, before dropping further to a six week low below $1170. To start that week, gold was trying to rally higher and regain lost ground from the end of the previous week, which saw it drop to near $1175. Over the last couple of months, gold has had an attraction to the key $1200 level, as every time it ventures away it returns quickly to trade right around it.
Back at end of March, gold eased a little for a few days to below $1185, although for the best part of the last few weeks, gold has moved strongly off the support at $1150 and then found some new support from the $1200 level. Throughout the second half of February, gold enjoyed rock solid support from the key $1200 level, which held it up on numerous occasions. For about a month, gold drifted steadily lower down to a one month low near the key $1200 level, before finding the solid support at this key level. 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 rose two percent to above $1,200 an ounce on Wednesday, heading for a second session of gains as the dollar hit a near three-month low after disappointing U.S. employment data. U.S. retail sales were also unchanged in April as households cut back on purchases of automobiles and other big-ticket items, suggesting the economy was struggling to make a strong rebound after barely growing in the first quarter. Spot gold hit a five-week high of $1,218 an ounce after the U.S. data was last trading up 1.8 percent at $1,214.30. U.S. gold futures for June delivery settled up $25.80 at $1,218.20 an ounce, its highest settle since early April. The metal added to Tuesday’s one percent gains, when it benefited from the softer dollar and volatility in global bond markets. “A close above technical resistance at $1,215 could help gold exiting the narrow trading range between $1,175 and $1,225 the metal has been confined over the past ten weeks,” ActivTrades chief analyst Carlo Alberto de Casa said. “The dollar’s weakening has been instrumental to the latest move higher and of course the view that the Fed is less likely to raise interest rates next month after weak economic data.”
(Daily chart / 4 hourly chart below)
Gold May 14 at 00:30 GMT 1214.8 H: 1219.1 L: 1191.3
Gold Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1180 | 1150 | — | 1240 | 1300 | — |
During the early hours of the Asian trading session on Thursday, gold is consolidating just shy of $1220 after its recent surge higher. Current range: trading right below $1220.
Further levels in both directions:
• Below: 1180 and 1150.
• 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 to below 65% as it has surged higher to near $1220. The trader sentiment is strongly in favor of long positions.
Economic Releases
- 23:50 (Wed) JP CGPI (Apr)
- 12:30 CA House Price Index (Mar)
- 12:30 US Initial Claims (09/05/2015)
- 12:30 US PPI (Apr)