Gold Chart 24 May 2010

The pullback in gold was somewhat deeper and more pronounced that I had expected and followed the long legged doji signal of the previous week.  However, despite Wednesday’s and Thursday’s wide spread down bar, Friday’s narrow spread candle suggests that momentum in the downwards move is waning as the bulls begin to buy once again.  This is further confirmed by Friday’s price action with the lower wick of the candle finding solid support from the 40 day moving average suggesting a bounce higher is likely.  However, the crossing of the 9 day moving average below the 14 is a warning signal and until this reverses we need to exercise caution in any longer term trading to the upside which could potentially run out of steam until we are back above all four moving averages.

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Gold Market News :

Gold bulls claim gold price could reach $3k within 5 years