Spot Gold Price Chart 8 Feb 2010

A volatile week for spot gold trading in which we saw the gold price fluctuate over a $70 per ounce range and with the weekly candle closing as a long legged doji suggesting that we could see a turning point in the recent decline from late 2009.  The daily chart would seem to confirm this view in the short term and following Thursday’s sharp sell off which ended with as a wide spread candle and closing below all three of our short term moving averages, Friday’s hammer candle came as a welcome relief to the gold bulls.  As a result we could see a rally for spot gold prices in the short term based on this strong technical signal which is also reinforced by the fact that Friday’s low found solid support in the congestion at $1045 per ounce suggesting that this could provide the requisite platform for a bounce back.  However, whilst the gold price remains below all of the short term moving averages this is still far from certain and any move higher could run into resistance from the moving averages now layered above and any trading opportunities to the long side should therefore be treated as short term trading positions for the time being.  At present we are still trading well above the 200 day moving average and provided this remains so then we can expect any short term rally to be sustainable but any breach of this technical indicator would signal a much deeper move lower.  For any continued rally to the upside we need to see a break and hold above $1125 initially followed by a step up and over the $1150 price handle.

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Gold Market News :

Gold Must Hold $1050

Will Spain & Portugal Sell Some of their gold?