Spot Gold Price - Daily Gold Chart 18th May 2009

Friday’s decline in equity markets boosted the spot gold price as gold traders and investors begin to fret about inflation as governments continue with quantitative easing programmes and stimulus packages in an effort to halt the slide in the global economy.  As a result the price of gold gained $4.98 to settle at $930.70 per ounce.  From a technical perspective Friday’s up-bar continued the bullish momentum of the week pushing ahead after 2 days of indecision in the market where gold prices took a breather on Wednesday and Thursday.  With both the 9 and 14 day moving averages now having crossed the 40 the bullish sentiment now seems firmly established and having cleared a significant area of resistance created earlier in February and March we should now see a push higher to re-test the $950 price region once again in due course and should this be cleared then there is no reason to suppose that we cannot expect to see the $1000 per ounce target on the horizon once again.  It is interesting to note from a fundamental perspective that the correlation on Friday between gold and a weaker US dollar appears to have fallen out of favour as both strengthened significantly on the day.  My trading suggestion for spot gold today is to look for small long positions on an intra-day basis using the 15 and 30 minute chart with a stop loss below the $916 region or lower, aiming for small profit targets.

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

Support:    $922.80 (Friday’s low)                                      Resistance: $940.70 (high of 25/03/09)

Support:    $917.00 (low of 13/05/09)                                   Resistance: $936.15 (high of 27/03/09)

Support:    $911.25 (low of 12/05/09)                                   Resistance: $934.05 (Friday’s high)