Gold – Key Support Level at $1150 Stands Tall

Gold – Thursday 9 July 2015

Throughout the last few weeks gold has steadily declined and fallen from above the key $1200 level back to a new three month low below $1150.  It has however enjoyed some solid support from the $1150 level in the last couple of days which has stopped the sharp falls for the moment.  It has recovered a little to now be trading in a narrow range somewhere between $1155 and $1160.  To close out last week and start this new week it has been able to rally against the medium term down trend and move back above the $1170 level before easing in the last few days.  Earlier last week 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 few weeks gold has been content to trade around the key $1180 level. Several 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 exception of the recent excursion below. 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 9 at 00:30 GMT   1158.1   H: 1164.8   L: 1147.2

Gold Technical

During the early hours of the Asian trading session on Thursday, Gold is trading in a narrow range right around $1158, after having recently fallen sharply down to a three month low below $1150. Current range: trading right below $1160.

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 eased back to just under 80% as Gold has fallen to a three month low below $1150. The trader sentiment is strongly in favour of long positions.

Economic Releases

• 23:50 (Wed) JP CGPI (Jun)
• 01:30 AU Unemployment (Jun)
• 11:00 UK BoE Monetary Policy Committee meeting and rate decision
• 11:00 UK BoE MPC – APF Total (Jul)
• 11:00 UK BoE MPC – Base Rate
• 12:15 CA Housing starts (Jun)
• 12:30 CA House Price Index (May)
• 12:30 US Initial Claims (04/07/2015)

* 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.