Gold Continues To Enjoy Support From $1150

Gold Continues To Enjoy Support From $1150

MarketPulse  | Jul 15, 2015 15:22

Gold – Wednesday, July 15th, 2015

Throughout the last few weeks, gold has steadily declined, and fallen from above the key $1200 level back to a new three month low below $1150 last week. It has, however, enjoyed some solid support from the $1150 level throughout last week, which stopped the sharp falls for the moment and allowed it to rally a little higher up to above $1160. In the last few days, it has rallied higher, but run into resistance at $1160, which has sent it lower again back towards $1155. To finish out, a couple of weeks ago, it was able to rally against the medium term down trend and move back above the $1170 level before easing off again. A couple of weeks ago, it surged higher to back above the key $1180 level before easing lower again. In the few days prior, gold had been easing back to below the key $1200 level, after recently surging higher to a three week high above $1205.

The $1200 level remains significant, and is continuing to place selling pressure on gold and likely the $1180 level now too. Prior to the surge, and in the last few weeks, gold has been content to trade around the key $1180 level. Several weeks ago, it rallied well to move from a two month low near $1160 back up to above $1190 again, before easing back to the $1180 level. The key $1180 level has consistently provided solid support, and has held it up now for a couple of months, with the exception of the recent excursion below. About a month ago, gold fell sharply back through the key $1200 level, and spent the remainder of that week consolidating in a narrow range around $1190. The $1200 level has been a significant level throughout most of this year, and remains a key level, presently offering reasonable resistance to higher prices, whilst lower the $1180 level continues to be significant. Throughout the last month or so, the $1180 level has provided some support and has been called upon recently.

Earlier in May, it was able to make a run through the $1200 level to reach a three month high above $1230; however, gold was quickly sold off and returned back to the $1200 level, where it enjoyed some support for several days. For around two months, through April, gold traded in a range between $1180 and around $1220, and had very few excursions outside these limits. Gold is currently pinned between resistance at $1200 and support at $1180, and it is surprising to see it trade in such a narrow range for several days. It seems it is waiting patiently for external factors to determine which level will be severely tested next.

(Daily chart / 4 hourly chart below)

Gold Daily ChartGold 4 Hour Chart

Gold July 15 at 02:30 GMT 1155.9 H: 1157 L: 1155

Gold Technical

S3 S2 S1 R1 R2 R3
1150 1200 1240

During the early hours of the Asian trading session on Wednesday, gold is easing back towards $1155, after making another run at $1160. Current range: trading right above $1155.

Further levels in both directions:

• Below: 1150.

• Above: 1200 and 1240.

OANDA’s Open Position Ratios

OANDA Gold 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 to just under 80%, as gold has eased back towards $1150. The trader sentiment is strongly in favour of long positions.

Economic Releases

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