Gold – Remains Motionless Below $1100

Gold – Thursday 30 July 2015

Throughout the last month gold has steadily declined and fallen from above the key $1200 level back to a new five year low below $1100 earlier last week. Earlier last week gold fell sharply through the $1100 level down to the multi-year low near $1070 before rallying back up towards $1100. It is presently consolidating in a narrow range below $1100 and meeting resistance there.  A couple of 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. During this time it has rallied higher but run into resistance at $1160 which has sent it much lower again. To finish out a few weeks ago it was able to rally against the medium term down trend and move back above the $1170 level before easing off again. A few weeks ago it surged higher to back above the key $1180 level before easing lower 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 July 30 at 00:35 GMT   1097.4   H: 1102.1   L: 1090.5

Gold Technical

During the early hours of the Asian trading session on Thursday, Gold is trading in a narrow range just below $1100 after recently dropping to a new multi-year low near $1070.

Further levels in both directions:

• Below:

• 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 above 65% as Gold has dropped sharply to below the $1100 level. The trader sentiment is strongly in favour of long positions.

Economic Releases

• 23:30 (Wed) JP CPI Core (Nation) (Jun)
• 23:30 (Wed) JP CPI Core (Tokyo) (Jul)
• 23:30 (Wed) JP Real Household Spending (Jun)
• 23:30 (Wed) JP Unemployment (Jun)
• 01:30 AU Import & Export price index (Q2)
• 01:30 AU Building approvals (Jun)
• 09:00 EU Business Climate Index (Jul)
• 09:00 EU Consumer Sentiment (Jul)
• 09:00 EU Economic Sentiment (Jul)
• 09:00 EU Industrial Sentiment (Jul)
• 12:30 US Core PCE Price Index (1st Est.) (Q2)
• 12:30 US GDP Annualised (1st Est.) (Q2)
• 12:30 US GDP Price Index (1st Est.) (Q2)
• 12:30 US Initial Claims (25/07/2015)

* All release times are GMT

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.