Spot Gold Prices - Daily Gold Chart 2nd November 2009

Technically a difficult end to the week for gold trading, with spot gold prices closing marginally lower on the day, having staged a recovery in afternoon trading, to end the gold trading session with a narrow spread down candle, but one with a deep lower wick. The reason that we are in a tricky area for trading in gold.  is that we have several different messages on the daily gold chart which are giving conflicting signals once again and making short term analysis more difficult than usual! The first issue is that we are now trading within a sandwich of the moving averages, with the 9 and 14 day above and the 40 day moving average below, with no clear focus, and indeed Friday’s high of the session seemed to find some resistance from the 9 day average. The second issue of course is the strong resistance now immediately above, which may provide a significant barrier to any move higher. Thirdly we have the bullish engulfing candle of Thursday which when coupled with the support from the 40 day moving average suggested a strong move higher, but which received little in the way of a firm confirmation on Friday, and finally, last but by no means least, the solid buying on Friday, indicated  by the deep lower shadow of the candle. So, all in all, a mixed picture, or as we say in Italy, a “right minestrone”!!

In summary, my personal view is that the bullish sentiment will overide the bearish elements currently evident, but to be certain, and certainly for longer term trend trading in the spot gold market, I would wait for a break and hold above the new resistance level above, and wait for spot gold prices to clear the upper level at $1065 which should then provide a solid platform for a breakout into new high ground once again, and provide a positive finish to the end of the year for the gold prices and and if you are looking to start gold trading on the best trading platform, then try the free MT4 download which is available from this excellent gold broker by simply following the link here.

R1:  1052.92       S1:  1033.88

R2:  1059.69       S2: 1021.61

R3:  1071.96       S3: 1014.84