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Gold Chart 20th July 2009

Gold Chart 20th July 2009

Gold Chart 20th July 2009

Friday’s candle on the daily gold chart, provided further evidence of indecision and a lack of market direction as traders withdrew from the market ahead of the weekend. With thin trading volume and little in the way of fundamental news, the price of gold drifted for much of the day, ending the session with a classic doji candle, with wicks to top and bottom and the open and closing prices identical. The high of the session seemed to find some resistance from the 40 day moving average, and until we see a breach and hold above this technical indicator, coupled with a clean break above the resistance level in place at the $940 price handle, can we assume that the upwards momentum will continue this week.  Indeed this morning’s price action on the gold chart has resulted in a strong upwards move as market players rediscover their appetite for risk as they move out of bonds and the US Dollar.  With spot gold prices having already broken through $950 per ounce $955-$960 beckons and a blast through here could see a a run towards the interim resistance at $980.  However, a word of caution – 75% of companies are still to report and with thin summer volumes gold prices may be more volatile than usual.

The short term is bullish, medium term sideways, long term bullish.

Support:    $932.40 (low of 16/07/09)                                   Resistance: $957.40  (high of 26/05/09)

Support:    $931.45 (low of 17/07/09)                                   Resistance: $956. 02  (high of  21/05/09)

Support:    $929.35 (low of  03/07/09)                                   Resistance: $948.22    (high of 26/06/09)