Spot Gold Price - Daily Candle Chart 20th March 2009

Spot Gold Price - Daily Candle Chart 20th March 2009

The bullish momentum seems to have returned to spot gold following the reversal candle we saw on Wednesday, and yesterday’s wide spread up bar pushed spot gold prices back to close just above the $950 per ounce mark. This momentum has carried over into this morning’s trading session with further solid gains being made in the market. The candle of yesterday was significant as it pushed through the minor resistance at $942, and the consolidation of the last two weeks should provide good support to a further move higher today.With all three moving averages pointing higher we should see the bullish tone continue today, and follow through into next week.

The renewed momentum has been built on the late Wednesday gains that began when the FOMC announced plans to step up the quantitative easing. So it was no surprise the measures reignited worries about longer term inflation which is back in the headlines once again providing ammunition for heated debates. Further on, with the US dollar tumbling, holdings in the world’s largest gold exchange traded fund jumped to a new record, reflecting new found interest in gold. My suggestion for today is to attempt small longs, buying into the trend on any dips in the hourly chart and with a stop loss below the $910 region. As always, please remember that trading volumes may be thinner today ahead of the weekend, and many traders will be squaring positions ahead of the two day break, so I would suggest taking profits early and re-opening new positions on Monday. Have a great weekend and good trading.

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

Support:    $943.65 (low of 25/02/09)                                   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: $961.25 (yesterday high)