Spot Gold Price Chart - 4th August 2009

Spot Gold Price Chart - 4th August 2009

Yesterday’s price action on the daily gold chart came as no great surprise following the strong upwards surge on Friday, and ended the trading session as a long legged doji suggesting that we may see a short term pullback in the price of spot gold before any push higher once again.  My primary concern, however, remains the futures volumes (or rather the lack of) which has now collapsed to yesterday’s figure of just over 2k contracts on Comex, a fraction of the normal trading volume.  In the last 2 days we have seen the futures volume move from 100k plus down to just under 11k on Friday and now to a measly 2k.  This is deeply worrying, particularly as we are in a strong upwards reversal which suggests, to me, that gold market participants are not joining in the move.  Even allowing for the summer lull these volumes are at an extreme.  Overall spot gold prices ended the gold trading session at $955.81 per ounce.   My longer term trading suggestion for gold is to step aside given the current volume anomalies, but for inter day players would be to look for opportunities to the short side using the 15 min chart, although given the lack of liquidity even this may be difficult.

Short term bearish, medium term sideways, long term bullish.

Support:   948     Resistance: 952

Support:   937    Resistance: 946

Support:  926     Resistance: 931