Gold – Consolidates Around Key $1240 Level

To close out last week, gold moved sharply lower back to the key $1240 level and then to a three week low just below $1230. To start this week it has rallied a little higher and is now consolidating around the key $1240 level. With the exception of the last couple of weeks, gold has enjoyed a very solid few weeks which has seen it surge to a five month high near $1308, before reversing and moving back under $1240 over the last couple of weeks. It presently finds itself trading in a narrow range right around $1240. A few weeks ago gold eased back a little and steadied below the $1280 level after surging to that area and a four month high, before its recent strong surge higher. Over the last month gold has been on the move as it has been able to rally strongly from around $1170 back through the key $1200 level and to a 12 week high just above the $1240 level before its further surge higher a couple of weeks ago. As expected the $1240 level remains key as it has provided plenty of resistance over the last few months and is now playing a role as gold has retreated back to it.

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 edged up from the previous session’s three-week low on Monday, as European equities were hurt by soft Chinese trade data and worries about Greece, though a steady dollar capped the upside. U.S. gold futures settled $6.90 higher at $1,241.50 an ounce. Spot gold gained 0.7 percent to $1,239.56 an ounce. The metal on Friday posted its biggest one-day loss since December 2013, hitting $1,228.25, as the dollar rallied after strong U.S. payrolls data. “For the three months up to the FOMC meeting gold has behaved as a safe haven because of Greece, but now the focus has shifted back to the U.S. and the timing of the U.S. interest rates hike”, Citi analyst David Wilson said, referring to last month’s interest-rate policy meeting of the Federal Open Market Committee. “We are seeing gold lower in the second quarter as the market does not seem really concerned about the impact of Greece on the rest of Europe at the moment.”

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