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Spot Gold Prices – Daily Gold Chart 21st April 2009

Spot Gold Prices - Current Gold Price Daily Chart 21st April 2009

Renewed concerns about the health of the US banks and rumours about a suspect blog purporting to have the stress test results for the banks spooked the markets as investors dumped stocks, thereby triggering short covering as they returned into the arms of safe haven gold.  In fact the stress test results are not due out until early May.   The spot gold price duly rose and finished the day $15.15 higher,  closing marginally above the 9 day moving average but failing to hold above the 14 day.  The price of gold is now trading in an extremely narrow range bounded on the downside by 3 tests at $868 and bounded on the upside, again by 3 tests just below $900, a range that has been consolidating for the last 11 days.     The upper band of this trading range also aligns strongly with further resistance to the left of the chart created in February and March of this year, and for any move higher we will need to see this level breached coupled with a break above both the 14 day and 40 day moving averages.  Should this fail to occur then we must assume that the bearish trend remains in place for the time being and this will only be confirmed should we see a break below the level outlined above.   With spot gold prices trading in such a narrow range I would suggest taking a wait and see approach.

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

Support:    $864.25 (yesterday’s low)                                   Resistance: $899.45 (high of 15/04/09)

Support:    $851.90 (low of 23/01/09)                                   Resistance: $893.75 (high of 16/04/09)

Support:    $843.25 (low of 22/01/09)                                   Resistance: $888.45 (yesterday’s high)