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Gold Trading Analysis 7 July 2010

spot gold price

Mysterious goings on in the gold market as details of a major swap arrangement with the BIS – Bank of International Settlements (Who is the Bank with the Golden Swap!) – as well as news that China does not consider gold to be a major part of its investment strategy, preferring instead the liquidity of US Treasury Bills.  Both excuses have been offered as reasons why the spot gold price has been falling from its highs of $1265 an ounce to close yesterday marginally above the $1190 per ounce price handle. From a technical perspective, whilst the longer term trend remains firmly bullish as outlined in yesterday’s gold commentary when we examined the monthly chart, the short term and intra day sentiment is indeed looking increasingly bearish as evidenced by the daily gold chart.  Yesterday’s wide spread down candle propelled gold prices through the $1200 per ounce price point once again and in early trading this morning spot gold is continuing to move lower and is currently trading at $1186.75 at time of writing.  This short term reversal is further confirmed by the 9 day moving average which is now crossing below the 40 day moving average adding additional pressure at present.  The only technical platform now below is the 200 day moving average which is currently sitting around the $1135 per ounce price region, but we do not expect this pullback to test this level for the time being as $1175 looks a more likely pause point.

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