spot gold price

Spot Gold Price 29 July 2010

As with many other commodities the sharp sell off in spot gold on Tuesday failed to carry through into Wednesday’s gold trading session which ended as a narrow spread up candle and the formation of a neat tweezer bottom pattern at $1,157.15.  Yesterday’s low, whilst also coinciding with that of Tuesday, also tested potential support in this region suggesting that we may have reached a temporary pause point in the recent bearish reversal for spot gold and with the 200 day moving average firmly below this may now present a positive technical picture for a rebound from this level.  However, for any move to be sustained we initially need to see a break and hold above the 9 day moving average, followed by the 14 day moving average and a breach of potential resistance at $1200.43 and beyond.  Should this price area be broken then expect to see gold push higher and break above the 40 day moving average and the $1220.00 per ounce level at the same time.  Whilst the short term picture remains bearish the longer term outlook remains heavily bullish.

From a fundamental perspective we have to remember that traditionally this is a very quiet period for gold and that the market does not usually pick up until September. However, if the gold price continues to drift down this may tempt buyers, especially if general market sentiment turns bearish.

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