Gold – Drops to Near Three Week Low Below $1170

Gold – Thursday 2 July 2015

Throughout the last couple of weeks gold has steadily declined and fallen from above the key $1200 level back to below $1170 and a three week low.  A few days ago it surged higher to back above the key $1180 level before easing lower again.  In the few days prior gold had been easing back to below the key $1200 level after recently surging higher to a three week high above $1205. The $1200 level remains significant and is continuing to place selling pressure on gold and likely the $1180 level now too.  Prior to the surge and in the last couple of weeks gold has been content to trade around the key $1180 level. A few weeks ago 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. About a month 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 July 2 at 01:00 GMT   1168.3   H: 1175.2   L: 1167.7

Gold Technical

During the early hours of the Asian trading session on Thursday, Gold is trading right below $1170 level after recently falling sharply from above $1180.  Current range: trading right below $1170.

Further levels in both directions:

• Below: 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 surged back up above 80% as Gold has fallen sharply back to near the key $1180 level. The trader sentiment is strongly in favour of long positions.

Economic Releases

• 01:00 NZ ANZ Commodity Price (Jun)
• 01:30 AU Trade Balance (May)
• 08:30 UK CIPS / Markit Construction PMI (Jun)
• 09:00 EU PPI (May)
• 12:30 US Initial Claims (27/06/2015)
• 12:30 US Non-farm & Private Payrolls (Jun)
• 12:30 US Unemployment (Jun)
• 14:00 US Factory Orders (May)
• EU EU’s Juncker & Moscovici at EU Parliament in Brussels

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