Spot Gold Price Chart - Daily Gold Prices 2nd June 2009

Given the extent of the rally in spot gold prices it was hardly surprising that yesterday’s gold chart saw both a degree of profit taking and nervousness as the gold price heads towards the $1000 psychological level.  Although the spot gold price posted a loss of $2.90, ending the day at $975.55 per ounce, it nevertheless managed to achieve a price high of $988.65 during the gold trading session, a level last seen on 24th February.  From a technical perspective yesterday’s candle on the daily gold chart closed as a shooting star with a deep upper shadow and small body, suggesting that we may well see a pullback in gold prices in the next couple of days.  Such a candle after a rally of this magnitude hardly comes a great surprise and provided it is confirmed today with a down bar, should provide us with some excellent entry opportunities for our longer term position trades as we wait for the bullish move to continue and breach the $1000 per ounce level in due course.   My personal view is that the reversal today and tomorrow will be relatively minor and we will see the trend re-established shortly and is simply taking a breather.

The short term is sideways while medium and long term is bullish.

Support:    $971.85 (yesterday’s low)                                   Resistance: $1000.00 (psychological level)

Support:    $958.35 (low of 29/05/09)                                   Resistance: $995.65 (high of 24/02/09)

Support:    $944.00 (low of 28/05/09)                                   Resistance: $988.65 (yesterday’s high)