Gold enjoyed a solid week last week surging to a three month high above $1225 towards the end
of last week. It has since consolidated a little and is now remaining steady above $1220. A
couple of weeks ago gold enjoyed support at $1180 which allowed it to rally back to $1190
and beyond to resistance at $1200. 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. 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.
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 futures closed up modestly on Friday, logging their biggest weekly gain since mid- January as soft U.S. consumer sentiment data weighed on the dollar and further diminished
expectations for a near-term rise in U.S. interest rates. U.S. gold futures for June delivery closed up 10 cents at $1,225.30 an ounce, up 3 percent on the week. Spot gold was up 0.2 percent at
$1,224 an ounce.
The dollar eased against the euro in the wake of the report, allowing gold to
extend a three-day rally that took prices to their highest since mid-February on Thursday at
$1,227.04. Recent economic reports have supported market expectations that the economy
is not strong enough for the Fed to start raising record-low rates from June. Data released on
Friday showed U.S. consumer sentiment fell more than expected this month, though an
earlier report showed manufacturing activity growth in New York State accelerated in May
after weakening for three consecutive months. “If the data remains soft in the United States, this
rally has potential,” Commerzbank analyst Eugen Weinberg said. “When data is more on the soft
side, the market will be looking for indications on when the Fed will be raising interest rates.”Author stuart Mcphee
