Spot Gold Prices - Daily Candlestick Chart 30th March 2009

Spot gold closed lower on Friday hit by a rising US currency and profit taking ahead of the weekend, and finished the week with a down bar closing just below all three moving averages. From a technical perspective it is interesting to note that the lows of the last four days, all bounced off the same support level, with Tuesday and Wednesday creating a tweezer bottom on the candle chart, all of which suggests that the current sideways movement, may be consolidating before a move higher in the short term. However, I would advocate caution at the moment as the trading range is very narrow, and with all three moving averages converging, we need to wait for some clear trading signals before re-entering the market for the longer term. In the short term our trading will be limited to scalping opportunities, using the 15 minute and 30 minute charts.

Ahead of key policy meetings this week, the dollar advanced against its major rivals,with gold once again correlating inversely with the US dollar, and with a very busy economic calendar on the horizon for this week, we are likely to see significant market volatility in all the major currency pairs, which could in turn affect the price of gold. In addition to the currency pressure deflationary data from Germany also weighted on gold, with many traders warning that the Euro could see further hits this week against the US dollar. So all in all a very trick week for trading, and hence my suggestion is to look for short term trading opportunities in the  shorter time frame spot gold chart, and to wait for the conclusion of this week with the G20 in London, before entering any longer term trades.

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

Support:    $918.10 (Friday’s low)                                      Resistance: $957.50 (high of 23/03/09)

Support:    $911.65 (low of 17/03/09)                                   Resistance: $945.32 (high of 26/03/09)

Support:    $906.55 (low of 12/03/09)                                   Resistance: $936.15 (Friday’s high)