Gold Prices 28 Oct 2009

Gold Prices 28 Oct 2009

The general weakness in the commodity markets continued yesterday for gold silver and oil, with gold prices ending the trading session with a wide spread down bar, but one in which the low of the day found some support from the 40 day moving average, suggesting that we may be coming to the end of this short term reversal lower. However, the bear cross now evident on the chart with the 9 day moving average diving below the 14 day average is not an encouraging sign, and much will now depend on two technical factors over the next few days.  First, any break below the 40 day average will confirm the bearish sentiment now evident in the gold market, and secondly whether the platform of support at the $1020 per ounce price level holds firm. Should we see a retest of prices at this level, and this price level provides the necessary support, then we can take this as a positive sign that the reversal lower has run out of steam, with a consequent move higher for gold prices in due course. Should we reach this level this will almost certainly include a breach of the 40 day moving average, so we will need to see a strong technical bounce for spot gold to recover from the current temporary setback on the daily gold chart. Overall, the longer term outlook remains bullish for spot gold, with the current pullback simply a short term correction before we begin to move higher once again.