Gold Spot Price -Gold Chart 21st May 2009

Gold Spot Price -Gold Chart 21st May 2009

With the euro achieving its strongest level against the US dollar since January spot gold prices closed dramatically higher as investors begin to return to commodities not for a better return but also because of worries about future inflation.  In addition the inverse correlation between a weak UK dollar and spot gold prices seems to have resumed.  Gold prices gained a total of $11.43 to settle at $937.15 per ounce.  From a technical perspective yesterday’s wide spread up bar added significant momentum to the bullish move higher closing above the $935 price point outlined in yesterday’s market commentary with the open of the day being fully supported by the 9 day moving average.  With all three averages now pointing higher we should expect to see an attack on the $950 resistance area and if this region is breached then we may well see a move back to re-test the $1000 per ounce level in due course.  Yesterday’s price bar also broke above the interim resistance level at $925 once again adding to the bullish tone although we may see some consolidation in today’s gold trading.

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

Support:    $924.75 (yesterday’s low)                                   Resistance: $957.50 (high of 23/03/09)

Support:    $917.30 (low of 19/05/09)                                   Resistance: $945.32 (high of 26/03/09)

Support:    $911.25 (low of 12/05/09)                                   Resistance: $940.61 (yesterday’s high)