Gold Prices - Daily Candle Chart 1st April 2009

Gold Prices - Daily Candle Chart 1st April 2009

Yesterday’s candle provided yet more evidence that we are in a period of sideways consolidation for the time being, with an inside day bar on the daily gold chart, with a lower high and a higher low engulfed by the previous day’s trading range, and ending with a repeat of Monday with a small doji candle in a tight trading area. With all three moving averages now tightly converged, and with the price of gold trading in a narrow range, it seems likely that this pattern will continue for the next two days as the G20 meetings take center stage in London, and the markets wait for any significant news which may or may not be forthcoming. Increasingly the event looks unlikely to produce anything of value or interest, and will soon be dismissed by the markets as irrelevant ( in my opinion).

In trading yesterday on the fundamental news front, spot gold started the day higher as investors appeared to be using the recent pullbacks as an opportunity to establish long positions again helped by a weaker US dollar and some strength in crude oil, but in later trading gold prices fell, closing near flat as the dollar bounced from its weakest levels and crude oil gave back the early gains. So overall, the trading session was one of a choppy consolidation which could be set to stay on the same course ahead of the ECB interest rate announcement and G20 meetings on Thursday. My suggestion for trading today would be to step aside from the market for the time being, and not trade until Friday at the earliest.

The short term trend is sideways while the medium and long term trends are bullish.

Support:    $908.55 (yesterday’s low)                                   Resistance: $945.32 (high of 26/03/09)

Support:    $906.55 (low of 12/03/09)                                   Resistance: $936.15 (high of 27/03/09)

Support:    $904.85 (low of 03/03/09)                                   Resistance: $924.50 (yesterday’s high)