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 Market Analyst - Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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