Spot Gold Price Chart 28 Jan 2010

Spot Gold Price Chart 28 Jan 2010

Recent dollar strength, in particular against the euro, has had an negative impact on commodity prices with the gold spot price suffering as a consequence with gold prices trying to base at the $1087 price level.  Nevertheless, today’s price action on the gold chart has resulted in a distinctive doji candle which could signal a significant turning point.  In addition somewhat ambiguous comments from George Soros about gold being the “ultimate asset bubble” at the Davos economic forum appears to have boosted gold prices which in early trading had  looked in danger of tumbling back towards the $1075 price handle.  From a technical perspective the doji candle comes as a welcome relief to gold bulls and may signal the start of a climb back to the $1100 per ounce price point.  However, with both the weekend and month end traders may be looking to square positions which may lead to a degree of volatility.   In addition with markets becoming increasingly nervous amid fears of another banking crisis we may well see a return to a positive correlation between the US dollar and gold, last seen at the height of the banking crisis and the collapse of Lehman Brothers as investors moved into safe haven assets.

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