Gold – Wednesday 5 August 2015
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 couple of 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.
(Daily chart / 4 hourly chart below)
Gold August 5 at 00:40 GMT 1086.8 H: 1095.1 L: 1081.1
During the early hours of the Asian trading session on Wednesday, Gold is trading in a narrow range right above $1085 after recently dropping to a new multi-year low near $1070.
Further levels in both directions:
• Above: 1100, 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 moved back to just below 65% as Gold has eased below the $1090 level. The trader sentiment is strongly in favour of long positions.
- 07:00 UK Halifax House Price Index (5th-10th) (Jul)
- 08:00 EU Composite PMI (Jul)
- 08:00 EU Services PMI (Jul)
- 08:30 UK CIPS/Markit Services PMI (Jul)
- 09:00 EU Retail Trade (Jun)
- 12:15 US ADP Employment Survey (Jul)
- 12:30 CA Merchandise Trade (Jun)
- 12:30 US Trade Balance (Jun)
- 14:00 US ISM Non-Manufacturing (Jul)
- EU ECB governing council hold meeting
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