Gold Spot Price - Daily Prices Spot Gold January 21st 2009

Initially moving lower the gold spot price finished the day on a high note gaining over 20 dollars in a range of $43.13. So it was no surprise that the spot gold prices broke above all three moving averages in an ‘Outside Day’ pattern which engulfed the previous day range. Renewed concerns about the banking sector were behind the flight to quality buying, but interestingly it also broke the inverse correlation with the US dollar which strengthened against the euro. As I mentioned yesterday the inauguration of Barack Obama did have a positive influence after speculation that the 44th President of the US could try to force banks to step up lending as a trade off for bailout funds.

For those of you who have been used to seeing the spot gold price on a daily basis, you would generally have expected it to fall alongside the euro, especially as the US dollar went on a short squeeze. However in the London fix, gold prices came in at £612.307, while gold priced in euros came in at 661.383 euros – this is telling us that gold is not simply a commodity but is also a currency, something many traders and investors have been suggesting for some time. In short, gold is money!

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

Support: $842.47 (14 day moving average) Resistance: $878.47 (high of 18/12/08)

Support: $834.23 (9 day moving average) Resistance: $872.90 (high of 26/12/08)

Support: $823.27 (yesterday’s low) Resistance: $866.40 (yesterday’s high)