Gold Fades on Friday

Gold’s Syrian induced spike on Friday looks good on paper but a closer investigation reveals otherwise.

Although we traded in a straight line to 1270 an ounce, we closed on Friday at 1255. This means that yet again, gold has unceremoniously failed at the 200-day moving average at 1258.50. A resurgent U.S. Dollar post-Friday’s data won’t have helped either, with New York ignoring the Non-Farm Payrolls number and concentrating on the low unemployment read.

 

Gold is running on vapours at these levels on a technical charting basis, with resistance at 1258.50 and Friday’s high at 1270. Support lies initially at 1250, with the critical level being 1240. A breakthrough here will almost certainly prompt a culling of long positioning.

It is clear that gold is a much lower beta to the Middle East event and North Korean posturing than the oil markets. We will thus need continuing infusions of geopolitical uncertainty to hold it up here for now, or a suddenly much lower dollar.

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.

Jeffrey Halley

Jeffrey Halley

Senior Currency Analyst
Based in Singapore, Jeffrey has over 25 years experience in the financial markets, having traded currencies, options, precious metals and futures. Jeffrey started his career at Barclays Bank in New Zealand. However he has spent most of it in London and Asia.Jeffrey focuses on the Asia time zone across asset classes. A regular commentator on business news TV and Radio, he is originally from New Zealand and holds an MBA from Cass Business School, London.
Jeffrey Halley

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