Gold Chart Friday 16 Oct 2009

Gold Chart Friday 16 Oct 2009

An interesting end to the week for gold prices which duly reacted to the technical signal of Wednesday, with a wide spread down bar on Thursday, but the bearish tone  did not follow through into Friday’s trading session, which ended with a deep hammer candle, suggesting that the reversal is only temporary. This view is reinforced by the fact that the body of the candle is perched on the 9 day moving average which seems to be providing a degree of support at this level. With the deep lower wick, and the technical support outlined above, we should see spot gold prices rise in the short term from this minor technical pullback and in due course, break out into new high ground above the $1065 top recently created with all three moving averages providing excellent support to the bull rally which is now firmly established on the daily gold chart.