Gold – Remains Steady Around Three Month High Above $1220

Stuart McPhee

Senior Currency Technical Analyst at Market Pulse

A few weeks ago Gold fell sharply back down through the key $1200 level down to below another support level around $1180, before dropping further to a six week low below $1170. To start that week Gold was trying to rally higher and regain lost ground from the end of the previous week which saw it drop to near $1175. Over the last couple of months Gold has had an attraction to the key $1200 level as every time it ventures away it returns quickly to trade right around it.

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.)

Back at end of March gold eased a little for a few days to below $1185, although for the best part of the last few weeks gold has moved strongly off the support at $1150 and then found some new support from the $1200 level. Throughout the second half of February gold enjoyed rock solid support from the key $1200 level which held it up on numerous occasions. For about a month gold drifted steadily lower down to a one month low near the key $1200 level before finding the solid support at this key level. At the beginning of December gold eased lower away from the resistance level at $1240 yet again back down to below $1200. During the second half of November gold made repeated runs at the resistance level at $1200 failing every time, before finally breaking through strongly. Throughout the first half of November Gold enjoyed a strong resurgence back to the key $1200 level where it has met stiff resistance up until recently.

Read More: http://www.marketpulse.com/20150517/gold-remains-steady-around-three-month-high-above-1220/