Daily Gold Price Chart - Spot Gold Prices 1st June 2009

Our warning of extreme caution in yesterday’s market commentary for spot gold prices did indeed come to pass and was reflected in an extremely volatile trading day on the daily gold chart.  A combination of a mild rebound in the US Dollar as hedge funds and financial institutions liquidated their end of quarter positions as well as investor indecision all contributed to this volatile mix.  Yesterday’s candle finished the session with a deep down body and wicks to both top and bottom and spread over a price range from the high of $945 to the low of $924 thereby reflecting the current instability in the gold market at present.  With the close of the day finishing below all three moving averages this suggests that the bearish sentiment has taken precedence, and should the 40 day moving average begin to turn then this will add further downward pressure.  However, before the gold bulls become too despondent it is interesting to note that the close of yesterday at $928.85 per ounce did find some support at this price level as any deeper move lower will first have to penetrate the strong support in place at $915 to $925.  My trading suggestion is wait until the end of this week, and in particular for the collision between the ECB and NFP fundamental news tomorrow which may well dictate the short to medium direction for equities, currencies and commodities.

The short term trend is bearish, the medium term trend is sideways while the long term trend is bullish.

Support:    $922.60 (yesterday’s low)                                   Resistance: $961.87 (high of 11/06/09)

Support:    $917.85 (low of 22/06/09)                                  Resistance: $958.20 (high of 12/06/09)

Support:    $912.70 (low of 23/06/09)                                   Resistance: $944.90 (yesterday’s high)