Gold – Wednesday 8 July 2015
Throughout the last couple of weeks gold has steadily declined and fallen from above the key $1200 level back to below $1160 and a three month low. In the last 24 hours however, the decline was marked with a strong fall down to the key support level at $1150 and a new three month low. It has recovered a little to now be trading in a narrow range around $1155. To close out last week and start this new week it has been able to rally against the medium term down trend and move back above the $1170 level. Earlier last week 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 July 8 at 00:30 GMT 1154.9 H: 1170.9 L: 1148
During the early hours of the Asian trading session on Wednesday, Gold is trading in a narrow range right above $1150 around $1155, after having recently fallen sharply down to a three month low below $1150. Current range: trading right around $1155.
Further levels in both directions:
• Below: 1150.
• Above: 1200 and 1240.
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 eased back to just under 80% as Gold has fallen to a three month low below $1150. The trader sentiment is strongly in favour of long positions.
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