Gold prices have taken traders on a roller coaster ride early in the week. On Sunday, gold dropped sharply after Swiss voters rejected a proposal to boost the Swiss National Bank’s gold reserves. Had the motion passed, the SNB would have been required to purchase some 1500 metric tons of gold over five years. Gold prices sank to $1142 per ounce early on Monday, but reversed directions and has posted huge gains, climbing close to 5% on the day. Still, the long-term range for gold remains bearish, as the US economy strengthens and the markets prepare for a rate hike in 2015.
XAU/USD has shown little movement in the Asian and European sessions. The pair continues to trade close to the key $1200 line.
1200 is fluid and could see more action during the day. It is currently a weak support level.
1215 is an immediate resistance line. 1240 is stronger.
Current range: 1200 to 1215. XAU/USD ratio is pointing to gains in long positions on Wednesday. This is consistent with the pair’s movement, as gold has posted very small gains. The ratio has a majority of long positions, indicative of trader bias towards gold moving to higher gold.