Gold Spot Prices 21 Jan 2010

Gold Spot Prices 21 Jan 2010

Today’s price action in the gold spot price confirmed yesterday’s breakout from the recent pennant pattern ending the gold trading session with a wide spread down candle but with a wick to the lower body.  Whilst the last two days have suggested a degree of bearish sentiment, it is interesting to note that neither today’s nor yesterday’s candle closed near the low of the day, suggesting that in both cases there has been some buying in the market.  Technically we are now approaching a potential support region in the $1085 per ounce level which may provide a platform for the spot gold price to rebuild.  However, should this fail to hold then we could see a much deeper move to re-test support in the $1050 per ounce level, and whilst this would represent a significant decline it is still well above the 200 day moving average which currently sits at the $1015 per ounce region.Whilst the short term outlook remains mildly bearish in the medium term we can expect to see a recovery and a break above $1150 would suggest that gold prices are set to recover in the longer term.

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Support & Resistance for Gold Spot Price (Daily Chart) :

S1:  1100.95     R1:  1135.45

S2:  1086.65     R2:  1155.65

S3:  1066.45    R3:  1169.95