Spot Gold Prices - Gold Price Chart 3rd June 2009

Yesterday was an interesting day for the price of gold, once again reinforcing the feeling that we are about to see a move towards the $1000 per ounce level as the bullish momentum continues to push gold prices higher. Gold trading in the early part of the day, was dominated by profit taking which saw prices fall sharply, only for gold prices to bounce back to close the session higher once again at $982.60/oz, a rise of $6.90 on the day, and largely on the back of yet more US dollar weakness, clearly evidenced on the dollar index chart.  Comments by Treasury Secretary Timothy Geithner in China, saying the US administration remains committed to a strong dollar, failed to impress the markets and the US dollar continued to head South. With the expected dollar strength failing to materialize as a result, this in turn provided further encouragment for gold prices which duly benefitted in later trading.

From a technical perspective, yesterday’s candle closed the day with a deep lower shadow, and with the low of the day bouncing off the 9 day moving average, once again adding weight to the bullish tone. In addition, the candle also negated the previous days’ “shooting star” candle which had suggested possible weakness in the market, once again reinforcing my view that we should see the psychological four figure price point breached sooner rather than later. With all three moving averages pointing higher, the question is not if, but when!

The short, medium and long term trends are all bullish.

Support:    $968.80 (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: $986.42 (yesterday’s high)