Spot Gold Daily Price Chart - 23rd March 2009

Spot Gold Daily Price Chart - 23rd March 2009

Spot gold prices finished slightly lower on Friday on weekend profit taking, with the market catching its breath after a sharp increase following the conclusion of the FOMC meeting last week. As I mentioned in the report last week, traders square positions ahead of the weekend and it did not come as a great surprise to see the profit taking effect come into play.  Technically gold lost just 1.70 dollars so this limited profit taking combined with the fact that the 9 day moving average crossed above the 40 day moving average are good indications that the bullish trend remains in place for the time being. However, Friday’s candle has given us a shooting star pattern on the gold chart, and whilst this is not at the top of a long rally, it should never the less, provide a cautionary note to today’s trading. The crossing of the moving averages is seen by many traders as a healthy consolidation, given that gold is expected to rise further due to inflation fears, and my suggestion for today is to attempt small longs with a stop loss below the support level at $910 per ounce.

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

Support:    $946.05 (Friday’s low)                                      Resistance: $978.10 (high of 25/02/09)

Support:    $931.50 (low of 26/02/09)                                   Resistance: $974.17 (high of 17/02/09)

Support:    $929.60 (low of 06/03/09)                                   Resistance: $967.00 (Friday’s high)