Gold Steadies Around $1085

Over the last six weeks or so, gold has steadily declined and fallen from above the key $1200 level back to a new five year low below $1100 a couple of weeks ago. It fell in a 24 hour period through the $1100 level down to the multi-year low near $1070 before rallying back up towards $1100. Since that time it has generally traded in a narrow range between $1090 and $1100, although it has drifted lower in in the last few days to back below $1090. Several weeks ago it enjoyed solid support from the $1150 level which stopped the sharp falls and allowed it to rally a little higher up to above $1160 however this now seems some distance away. During this time it rallied higher but run into resistance at $1160 which has sent it much lower again. Just prior to that it was able to rally against the medium term down trend and move back above the $1170 level before easing off again.

Should it rally back higher in the foreseeable future, then the $1200 level remains significant as it provided ample resistance to higher prices for an extended period. A couple of months 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. It will be some effort just to get back within reach of the $1200 level after its recent strong falls.

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.

Gold August 6 at 00:40 GMT 1085.4 H: 1092.8 L: 1083.1

During the early hours of the Asian trading session on Thursday, Gold is trading in a narrow range right around $1085 after recently dropping to a new multi-year low near $1070.

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Further levels in both directions:

• Below:

• Above: 1100, 1200 and 1240.