Gold Prices Slide on Greek Vote

Gold has posted losses on Monday, as the metal trades at a spot price of $1285.80 per ounce in the European session. Gold has lost ground following the election win in Greece by a far-left party. There are no US releases on Monday.

Greeks went to the polls on Sunday, and the far-left Syriza party emerged victorious. Syriza ran on a platform of ending the crushing austerity scheme which Greeks have endured as part of the €240 billion bailout negotiated between and the EU, ECB and IMF. Predictably, the euro fell after the election results, slipping to 1.1099. However, the common currency has stabilized, gaining over 100 points on Monday. Syriza’s win certainly throws a monkey wrench into the Greek bailout program, but the new Greek government is likely to negotiate a deal with Greece’s creditors. A Greek exit from the Eurozone may make for interesting headlines, but such a scenario is extremely unlikely. Indeed, Greek Prime Minister-elect Alexis Tsipras has promised to keep Greece in the Eurozone. Following some volatility immediately after the Greek election results, the markets are calm on Monday. This is underscored by strong gains by the euro as well as the drop in gold prices.

XAU/USD for Monday, January 26, 2015

XAU/USD January 26 at 13:25 GMT

XAU/USD 1285.80 H: 1299.08 L: 1275.91

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1240 1255 1275 1300 1322 1345

 

  • XAU/USD posted losses in the Asian session. In European trade, the trend has continued, with the pair touching the support line of 1275.
  • On the downside, 1275 is under pressure. Will the pair break through during the day? 1255 is next.
  • 1300 is an immediate resistance line.
  • Current range: 1275 to 1300

Further levels in both directions:

  • Below: 1275, 1255, 1240, 1215 and 1200
  • Above: 1300, 1322, 1345 and 1375

 

OANDA’s Open Positions Ratio

XAU/USD ratio is almost unchanged on Monday. This is not consistent with the pair’s movement, as gold has posted strong losses. The ratio has a majority of long positions, indicating trader bias towards gold reversing directions and moving to higher ground.

XAU/USD Fundamentals

  • There are no US releases on Monday.

 

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.