Gold Yet Again Returns To Key $1200 Level
In the last week or so, gold has eased below the key $1200 level again before rallying back above it in the last 24 hours. It seems gold presently has an attraction to the key $1200 level as every time it ventures away it returns quickly to trade right around it. A couple of weeks ago, gold sprung to life surging higher away from the key $1200 level back to a seven-week high above $1220 before easing back and finding some support at the key $1200 level to finish out last week. A few weeks ago, 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.
It still has its eyes firmly on the key $1200 level and it will be interesting to see whether it can remain above this level and continue to receive support. Prior to the recent move, gold remained quite steady enjoying strong support from the $1150 level whilst some eyes would have been looking lower. The next obvious technical support level lower is around $1130, and if it was to move through this level, then it would be trading at multi-year lows and looking very bearish. When gold broke through the rock solid support level at $1200 recently, it opened itself up to some potential downside, which was played out a couple of weeks ago.
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.
Throughout the second half of October, gold fell very strongly and resumed the medium-term down trend falling from above $1250 back down through the key $1240 level, down below $1200 to a multi-year low near $1130. It spent a few days consolidating around $1160 after the strong fall, which has allowed it to rally higher in the last couple of weeks. Earlier in October, gold ran into the previous key level at $1240; however, it also managed to surge higher to a five-week high at $1255. In late August, gold enjoyed a resurgence as it moved strongly higher off the support level at $1275; however, it then ran into resistance at $1290. In the week prior, gold had been falling lower back towards the medium-term support level at $1290; however, to finish out last week, it fell sharply down to the previous key level at $1275.
Gold settled higher on Wednesday as the dollar pared gains after weaker than expected U.S. economic data, although stronger European shares limited the upside. Spot gold, lower initially, closed up $8.70 at $1,201.3 an ounce. It had fallen as much as 1.2 percent to a two-week low of $1,183.68 on Tuesday. The dollar cut initial gains and was unchanged against a basket of currencies, after data showed U.S. industrial output fell 0.6 percent in March. "The dollar's retreat is mainly due to the weak U.S. economic data …as long as we have weak economic figures out of the U.S., it is less likely that the Fed will start raising interest rates sooner rather than later," Commerzbank analyst Daniel Briesemann said. The U.S. currency also lost ground against the euro after the European Central Bank (ECB) said it expects eurozone economic recovery to broaden and strengthen and ruled out a cut to deposit rate. Gold's rebound on Wednesday was however capped by stronger European shares, hitting a 14-year high.
(Daily chart / 4 hourly chart below)
 
Gold April 16 at 00:15 GMT 1203.7 H: 1204.8 L: 1188.9
Gold Technical| S3 | S2 | S1 | R1 | R2 | R3 | | 1200 | 1150 | - | 1240 | 1300 | - |
During the early hours of the Asian trading session on Thursday, gold is trading in a very narrow range above $1200. Current range: trading right above $1200.
Further levels in both directions:
• Below: 1200 and 1150.
• Above: 1240 and 1300. |
