Spot Gold Prices - Gold Price Chart 7th July 2009

Spot gold prices fell yesterday amid general commodity weakness and a rebound in the US Dollar, losing a total $6.30 to settle at $925.85 per ounce.   In addition gold prices may also have been dealt a temporary blow by the Indian Government’s decision to increase the import duty on gold and silver bullion which some analysts are speculating may kill off any residual demand for these metals in the short term.  As the world’s largest consumer of gold, importing nearly 800 tonnes a year, or 20% of global demand, India has recently seen a fall of almost 60% in the first six months to June compared with last year.  This fall has been due to a combination of higher prices and the economic downturn.  In an effort to lessen the impact of the increase in duty the Indian Government has cut the excise duty on branded jewellery to zero.   However, the Indian jewellery market too has been suffering with demand shrinking 9% to 469.7 tonnes in 2008 and the decline accelerating this year where demand in the first quarter of 2009 dropped 52% year on year to 34.7 tonnes, the lowest level for 20 years.  The affect of this crucial fundamental data on the gold chart will be interesting as technically, whilst the picture remains mildly bearish, gold prices do seem to be finding some support at current price levels.  Yesterday’s candle was indicative ending the gold trading session down overall, but with a deep shadow to the bottom of the candle suggesting a mildly bullish pick up in later trading.  While gold prices remain below all three moving averages the bearish flavour remains, however, the intermediate support level at $920 now seems to be providing a platform for a possible move higher, but should this be breached then we could see a much deeper move, possibly to re-test the psychological $900 per ounce price point once again.

The short term trend is bearish, the medium term trend is sideways while the long term trend is bullish.

Support:    $920.30 (yesterday’s low)                                   Resistance: $958.20 (high of 12/06/09)

Support:    $917.85 (low of 22/06/09)                                    Resistance: $941.10 (high of 02/07/09)

Support:    $912.70 (low of 23/06/09)                                   Resistance: $932.60 (yesterday’s high)