Spot Gold Prices - Current Gold Price 6th May 2009

A mixed picture in spot gold yesterday with prices initially moving higher on the back of equities and supported by renewed worries about inflation, a weaker dollar, rumours that China is continuing to add to its gold reserves and, of course, nervous anticipation of the bank stress test results.  However, spot gold prices retreated later in the trading session as profit taking became the order of the day and gold finished at $897.55 per ounce, having lost $5.45 overall.  From a technical perspective yesterday’s candle provided a somewhat confusing picture which precisely mirrors the broader market at present where short term profit taking, indecision, rumour, and speculation are all the order of the day ahead of key news items, in particular the bank stress test results, and until these are released we are likely to see more of the same for today, tomorrow and Friday.  As outlined in yesterday’s market commentary for gold prices, my suggestion was to look for small long positions on an intra day basis and to close out any profits quickly.  This is not a time to look for longer term trends and we need to wait until the market has absorbed all the news of the next three days which hopefully will then provide us with some longer term gold trading opportunities.  Yesterday’s closing price for gold finished below the 40 day moving average but above both the 9 and 14, the former of these neatly supporting the closing price suggesting that we might see a move higher this morning which indeed seems to be the case in early trading so far.  With the price of gold now above the $900 per ounce price point once again and with an increasing level of support below we should see gold prices move up in due course.

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

Support:    $894.55 (yesterday’s low)                                   Resistance: $922.77 (high of 04/03/09)

Support:    $884.05 (low of 04/05/09)                                   Resistance: $918.50 (high of 27/04/09)

Support:    $871.50 (low of 16/04/09)                                   Resistance: $915.75 (yesterday’s high)