Spot Gold Chart 1 Sep 2009

Gold prices finished the month almost exactly where they had started, and ended the gold trading session today with a bearish flavour represented on the daily gold chart with a wide spread down bar but with a deep lower wick thereby giving gold bulls a modicum of comfort.  What is most interesting, however, about yesterday’s  gold trading session, is that the price of gold remained well within the pennant envelope outlined in my previous gold commentary, suggesting once again that the consolidation of the last few weeks has some way to go, and that when we see the breakout occur, it will be dynamic and forceful.  In the meantime we have to wait for this to occur, and in yesterday’s trading, gold like many other commodities, took it’s lead from the Chinese equity markets which saw significant falls.  From a technical perspective both the 9  and 14 day moving averages still seem to be supporting the low or close of each trading day, which would suggest that when the breakout does occur it may well be to the upside. In the meantime we have to be patient and wait for the pennant pattern to be breached which will then indicate that a new trend in gold prices is about to be established once again.   Overall spot gold prices closed at $951.76 per ounce having reached a high of $960.40 and touched a low of $944.85 per ounce.

Support: $930.35   Resistance: $955.67

Support: $918.23   Resistance: $929.89

Support: $905.43  Resistance: $917.90