Spot Gold Prices - Daily Candle Chart 20th Price 2009

After enjoying a rally of more than $80 in the last few weeks spot gold stopped for a breather yesterday before the final step in reaching the psychological important $1000 level. Whilst the candle from yesterday is hardly dramatic, it does provide one small clue that we need to consider for today, and that is simply that the high of the day, was the same as the high of the day for Wednesday, indicating that there may be some level of resistance, before we see spot gold prices move higher in the next few days. As I suggested yesterday, we did in fact see some profit taking in the gold market which pulled the yellow metal back from the 7 month high it touched a day before, but I still consider the uptrend intact given that investors seem to be losing confidence that the government stimulus package will help the global economy the way they planned. In the short term a quick rebound will depend on the growing demand as more investors rush to buy physically backed exchange traded gold funds.

If you have long positions open at the moment, then I would suggest that these are closed out for the weekend and new positions opened on Monday as we often see profit taking on a Friday, as traders square off their positions. If you are trading intra-day, then I would suggest small long positions this morning with tight stops below, should we have a reaction ahead of the weekend. Good luck with your trading and investing and see you all again on Monday.

The short, medium and long term trends are all bullish.

Support:    $967.90 (yesterday’s low)                                    Resistance: $1000.00 (psychological level)

Support:    $960.30 (low of 18/02/09)                                    Resistance: $988.40 (high of 15/07/08)

Support:    $952.93 (9 day moving average)                               Resistance: $986.27 (yesterday’s high)