Gold Spot Prices - Current Gold Price Chart 24th June 2009

Gold Spot Prices - Current Gold Price Chart 24th June 2009

Despite some bearish fundamentals which are beginning to suggest some liquidations in gold backed exchange traded funds it was, in fact, a weaker dollar and a rise in crude oil prices which stemmed the fall in spot gold prices.  Spot gold initially fell in early trading to a six week low but recovered to gain $3.12 to settle at $924.80 per ounce.  From a technical perspective yesterday’s candle provided us with a classic reversal signal, namely a hammer which we now need to wait for a confirming signal which will no doubt following today’s FOMC statement.  Whilst the technical picture remains bearish, with the 9 day moving average crossing the 40 day, the macroeconomic picture is having more of an effect on gold prices than the technical at the moment, and in particular the FOMC statement later today will dictate the short term direction for the US Dollar and, hence, the price of spot gold.  The statement is widely expected to be Dollar negative which in turn should send gold and silver prices higher as a result and from a technical perspective this should confirm yesterday’s hammer signal.  Indeed should the statement as negative as some expect we may well see a break above all three moving averages later today coupled with a breach of the resistance now in place at the $940 per ounce price point.  If this set up occurs then this may well signal a return to the longer term bullish trend in gold prices which we expect to resume in due course.  The Dollar negative sentiment has also been pushed along by the ECB with comments from various members “talking up” the Euro.

The short term trend is bullish, the medium term trend is sideways while the long term trend is bullish.

Support:    $912.70 (yesterday’s low)                                   Resistance: $939.10 (high of 19/06/09)

Support:    $904.65 (low of 08/05/09)                                  Resistance: $935.00 (high of 22/06/09)

Support:    $895.30 (low of 06/05/09)                                   Resistance: $926.99 (yesterday’s high)