Gold Price Chart - Daily Spot Gold Price 20th April 2009

The sell off in gold continued last Friday as risk appetite increased with the market now seeming to think that the worst of this  financial crisis may be coming to an end and the earning season, so far, not producing the dire results that many commentators had suggested.  All this has has certainly helped to ease investor worries longer term.  This has also led to investors closing out positions in gold backed exchange traded funds on a bout of profit taking and a search for better returns which has impacted negatively on the spot gold price.   As a consequence gold lost a further 9 dollars to close  at $867.10/oz.   From a technical perspective the price of gold now sits firmly all three moving averages which are pointing to a move lower and the key for this week will be which price point provides the support required to see a reversal for a move higher in the longer term.  The first of these is likely to be seen immediately below the current price at around $854 and should this fail to hold we could see a move back down to re-test support at the $814 region.   With Friday’s low having created a platform with the daily price 2 weeks ago and coupled with this morning’s small bounce, we could be seeing an attempt to re-base around the $860 price level, but this may only be a very short term reversal before moving lower once again.  My suggestion for today is to attempt small short positions looking for your entry and exit points on the hourly and 15 min charts.

The short term trend is bearish while the medium and long term trends are bullish.

Support:    $864.45 (Friday’s low)                                      Resistance: $885.97 (14 day moving average)

Support:    $851.90 (low of 23/01/09)                                   Resistance: $880.52 (9 day moving average)

Support:    $843.25 (low of 22/01/09)                                   Resistance: $876.50 (Friday’s high)