Gold - Enjoying Support From $1180 Again

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Includes: AGOL, GLD, GTU, IAU, OUNZ, PHYS, QGLDX, SGOL
by: Dean Popplewell

By Stuart McPhee

Gold - Thursday 4 June 2015

In the last 24 hours or so gold has fallen sharply back through $1190 however it has yet again received solid support from $1180 which has held it up now for a couple of months. Earlier last week gold fell sharply back through the key $1200 level and spent the remainder of the week consolidating in a narrow range around $1190. It has began this new week doing the same trading in a very narrow range right 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 June 4 at 00:20 GMT 1185.3 H: 1195.6 L: 1179.5

Gold Technical

S3 S2 S1 R1 R2 R3
1180 1150 - 1200 1240 -

During the early hours of the Asian trading session on Thursday, gold continues to trade in a very narrow range just below $1190. Current range: trading right below $1190.

Further levels in both directions:

• Below: 1180 and 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 moved back above 70% again as gold has eased back towards $1180. The trader sentiment is strongly in favour of long positions.

Economic Releases

  • 01:30 AU Retail trade (Apr)
  • 01:30 AU Trade Balance (Apr)
  • 11:00 UK BoE Monetary Policy Committee meeting and rate decision
  • 11:00 UK BoE MPC - APF Total (Jun)
  • 11:00 UK BoE MPC - Base Rate
  • 12:30 US Initial Claims (30/05/2015)
  • 12:30 US Non Farm Productivity (Final) (Q1)
  • 12:30 US Unit Labour Costs (Final) (Q1)
  • 14:00 CA Ivey PMI (May)

* All release times are GMT