Gold Price Chart - Daily Gold Prices 19th May 2009

Spot gold prices finished lower as commodities and currencies took their cue from equity markets which saw triple digit gains, achieved in a vacuum on a day bereft of any fundamental news on the economic calendar, closing the day $11.85 lower and settling at $918.85.  From a technical perspective the wide spread down bar on yesterday’s gold chart has created a bearish signal (bearish engulfing candle) on the previous day closing marginally below the 9 day moving average, and perhaps suggesting that we may see a short term reversal in the price of gold in the next few days.  If this is signal is confirmed in trading today then we could see a move back to re-test support in the $910 region and possibly as low as $895, but as always we need to wait and see whether this is a confirmed, or simply a false signal created on a day with no real news.  Indeed in many of the currency pairs we saw the same effect with currencies rising dramatically, even though the technical picture was bearish suggesting that yesterday’s analysis should be treated with some degree of caution.  It would not be a great surprise to see yesterday’s price action promptly reversed as the flow of substantive news flows once again.

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

Support:    $918.85 (yesterday’s low)                                   Resistance: $940.70 (high of 25/03/09)

Support:    $917.00 (low of 13/05/09)                                   Resistance: $936.15 (high of 27/03/09)

Support:    $911.25 (low of 12/05/09)                                   Resistance: $933.60 (yesterday’s high)