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Spot Gold Price Analysis 14 Sep 2010

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Friday’s deep hammer candle on the daily spot gold chart which touched a low of $1236.68 on the day, duly provided a strong trading signal for gold bulls with validation of the signal coming in today’s gold trading session as the precious metal continues its longer term bullish trend breaking back above all four moving averages once again to trade, at time of writing, at $1253.28 per ounce.

The gold market now awaits the inevitable break out into new high ground which will see gold breach June’s high of $1265.05 on the daily gold chart, with both the 9 and 14 day moving averages continuing to provide excellent support for the recent bullish rally. ¬†As outlined in yesterday’s gold market commentary the weekly chart provides us with an interesting perspective and, in particular, the importance of the 40 week moving average which has remained unbroken since early 2009 when gold was trading at $850 per ounce and has provided a solid platform of support ever since. ¬†Commodities, like forex, are one of the few instruments and markets that once a trend has started, will tend to continue that trend for a substantial period and that maxim is certainly true for spot gold at present as we now await the breakout into new high ground, as a result.