Gold to continue ranging

Gold traded in a near $20 an ounce range between $1740.00 and $1760.00 an ounce overnight but ultimately settled almost unchanged for the day at $1752.50 an ounce. Some weekend risk-hedging by Asian investors has lifted gold by a modest 0.20% to $1756.00 an ounce today.

 

The yellow metal staved of US Dollar strength overnight to the relief of gold bugs, even if that capped its intra-day rally. Weekend risk-hedging should support the metal into the close of the week. That said, the balance between buyers and sellers looks more even today, and after Monday morning’s early flash-crash, I doubt investors will have the nerve to go into the weekend heavily long.

 

Baring a sharp move higher by the US Dollar in New York, it should leave gold roughly contained between immediate support/resistance at $1840.00 and $1860.00 an ounce. Intermediate support lies at $1725.00 with the $1800.00 to $1805.00 region a formidable resistance zone.

 

Given the horror of last Monday’s flash-crash and given the Fed tapering noises grow louder by the day, lifting the US Dollar, it is hard to see gold powering higher from here. More than likely, the nervous FOMO long-positions initiated on Wednesday are likely to cut and run at the first sign of trouble.

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 as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

Latest posts by Jeffrey Halley (see all)