Spot Price of Gold 27 Oct 2009

Spot Price of Gold 27 Oct 2009

An encouraging day for gold bulls yesterday, as gold prices failed to follow through on the bearish sentiment of Monday, and ended the trading session with a small hammer candle sandwiched between the 9 and 14 day moving averages above, and the 40 day moving average below. Whilst this is far from being a strong signal, it does suggest that the bearish picture of the last two days may only be a temporary reversal lower, and as suggested in yesterday’s gold market commentary this will simply be a step in the leg higher of a series of higher highs and higher lows in the gold bull trend. The key, of course, to this analysis will be whether we see an re-test of the strong support in the $1020 price level, and in addition whether the 40 day moving average comes into play as a result. At present this seems unlikely, and should we see spot gold prices stabalise at the current level, then the reversal lower of the last few days can be assumed to be a temporary pause point, as we wait for a break higher through and above the resistance now ahead in the $1050 to $1070 price region. Once this level is breached then we should see spot gold prices continue their journey higher into new high ground.