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Daily Spot Gold Prices – January 16th 2009

Daily Chart Spot Gold Prices - January 16th 2009

Yesterday’s early session saw daily spot gold prices rally helped by safe haven buying on renewed concerns about the banking sector. In later trading, the price of gold slipped into negative territory pressured by a stronger US dollar and weaker oil prices but managed to stage a comeback closing higher for the day. Going forward the price of gold is likely to take its direction from the equities markets with additional hints coming from the performance of the US dollar.

Following the ECB interest rate cut of 50 bps, all the major currencies remained volatile for the remainder of the day, and in particular the US dollar was not helped by a tumble in PPI data with a fall of 1.9%, and with initial jobless claims rising 11.5%, coupled with the Empire rate which remained negative for the 9th month in a row. We may see further US dollar weakness today, with a rise in spot gold prices as a result.

The short and medium term trends are bearish while the long term trend is bullish.

Support:    $801.62 (yesterday’s low)                                 Resistance: $833.51 (9 day moving average)

Support:    $800.00 (psychological level)                             Resistance: $829.30 (high of 14/01/09)

Support:    $785.45 (low of 24/11/08)                                 Resistance: $828.90 (40 day moving average)