Spot Gold Price Chart 10 Feb 2010

As outlined in yesterday’s gold market commentary Monday’s candle failed to provide any confirmation of Friday’s deep hammer candle which was finally validated Tuesday, with the gold spot price ending the day on a wide spread up bar but which still closed below all three moving averages.  Recent correlation between gold the US dollar has not been as strong as the recent past and once again we saw this in play yesterday with the steep fall in the dollar only converting to a mild rise in gold.   Whilst this has provided an encouraging signal for gold bugs there are still several bearish elements to consider not least of which was the apparent resistance from the 9 day moving average which brought to a halt yesterday’s rebound.   For this potential reversal to have any degree of momentum we need to see a break and hold above all three short term moving averages which should take us somewhere towards the $1120 price point and here again we may run into strong resistance from the recent sideways consolidation at this level.  The spot gold price still remains firmly wedged between the short term moving averages to the upside and the longer term 200 day moving average below.

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Gold Market News :

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Dollar Gold Relationship

Chinese SWF moves into gold & oil