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Gold Trading Analysis 7 Oct 2009

gold chart 6 Oct 2009

gold chart 6 Oct 2009

A truly seminal day for the gold price in both the spot and gold futures market as it finally broke out into new high ground in dramatic fashion.  A combination of a weak dollar & technical factors resulted in December Comex gold futures hitting a record high for the most actively traded futures contract ever as the gold contract peaked at $1,038 per ounce, taking out the previous most actively traded gold future set in March 2008.  In addition the October gold future reached $1,036.40, another record.  At around 13.12 GMT December gold was up $19.50 to $1,038.30 an ounce.  Meanwhile spot gold prices ended their gold trading session with a wide spread up candle of such momentum which propelled gold pricec above the $1040 per ounce price, and in the process breaking above the previous top with ease, and creating another support area below.  As I outlined in my gold market report of Monday, the bullish hammer candle of Friday was an extremely strong signal, and was duly confirmed on Monday with a wide spread up bar, which provided the foundation for spot gold prices yesterday, and with all three moving averages now pointing firmly higher, this is a trend that is set to continue for some time, a view reinforced by the fact that the gold price has now broken out twice in dramatic fashion in the last few weeks, suggesting that the move has a long way to run before the market takes a breather and pauses.

The short term outlook for the gold price is bullish, the medium term is bullish and the long term sideways.

Support : 1018.67   Resistance : –

Support: 1005.89   Resistance : 1017.35

Support:    994.78   Resistance : 1004.56