Spot Gold Price Chart 18 Nov 2009

Spot Gold Price Chart 18 Nov 2009

Although it was yet another day of gains for the gold spot price yesterday it was, perhaps, less convincing than that of last weeks, with the candle for the gold trading session ending with a narrow body, and shadows to both the top and bottom.  In addition, whilst all three moving averages remain extremely bullish, it is perhaps becoming apparent that the market is losing some of its initial momentum as evidenced by the narrowing spreads on the daily candles, and we may expect to see a minor reversal in the short term as the gold market takes a breather before pushing higher once again. Should we see any minor pullback from this price level, then this is unlikely to be anything more than the gold market taking a rest, and no doubt we will see the moving averages providing support to any fall in spot gold prices as a result, indicating that the bullish momentum remains firmly in place. As such any move lower should be seen as an entry point to the market for further long positions, provided the technical correction does not break below any of the moving averages or penetrate the potential support areas now firmly established in the move higher. From a fundamental perspective there seems no let up to trader and investor demand for gold with Mauritius the latest nation to buy 2 tonnes from the IMF and with reports that, longer term, gold output is set to decline and Barrick shutting its hedge book only adding to the febrile and exuberant atmosphere surrounding the gold market.

Support & Resistance for the Gold Spot Price:

S1:  1134.21    R1:  1152.16

S2:  1125.63   R2:  1161.53

S3:  1116.26   R3:  1170.11

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