A happy new year to all our gold traders and I am sure many of you were disappointed by the lacklustre end to the year following the meteoric rise of the spot gold price during November.  December’s sharp sell off was initially signalled by the deep hanging man candle first seen in late November on the daily gold chart, a signal which was then confirmed in dramatic fashion during December and coincided with a strengthening of the US Dollar.  So what now for gold prices in 2010?  Longer term the outlook still remains firmly bullish for the commodity but in the short term the picture is less clear.  The final two weeks of 2009 saw the spot gold price hovering between $1080 and $1100 per ounce and throughout this period traded below all three moving averages.  However, it is always dangerous to draw any firm conclusions at this time of year as trading in the final two weeks is often exemplified by thin volumes and year end squaring of positions with many traders and investors booking profits.   The key price level to the upside has now been established in the $1140 per ounce price handle and a break above here, coupled with a breach of all three moving averages, would suggest that the recent downwards move has petered out as we look towards momentum to the upside being re-established.  Indeed in early trading this morning gold is currently trading $16 per ounce higher, with the platform at $1090 now seeming to provide a base for consolidation.   Some interesting fundamental news for gold is that the Vietnamese government has ordered the closure of all gold trading by the end of March – read the full report here - is this a sign for other governments to follow suit?

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