Gold Remains Steady Around $1180

by: Dean Popplewell

By Stuart McPhee

Gold - Wednesday 17 June 2015

In the last couple of weeks gold has been content to trade around the key $1180 level and it presently sits right above $1180 after recently surging higher to $1190. During last week it rallied well to move from a two month low near $1160 back up to above $1190 again before easing back to the $1180 level. The key $1180 level has consistently provided solid support and has held it up now for a couple of months, with the recent exception. A few weeks 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. 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 17 at 00:45 GMT 1181.7 H: 1188.1 L: 1176.1

Gold Technical

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

During the early hours of the Asian trading session on Wednesday, gold is easing back to $1180 after recently surging higher to $1190. Current range: trading right around $1180.

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 to 75% again as gold has consolidated around $1180. The trader sentiment is strongly in favour of long positions.

Economic Releases

  • 00:30 AU Westpac-MI Leading Index (May)
  • 08:30 UK Average Earnings (incl. bonus) (Apr)
  • 08:30 UK Claimant Count (May)
  • 08:30 UK ILO Unemployment Rate (Apr)
  • 08:30 UK BoE MPC minutes released
  • 09:00 EU HICP (May)
  • 12:30 CA Wholesale Sales (Apr)
  • 18:00 US FOMC - Fed Funds Rate

* All release times are GMT