Gold Spot Price Chart - 13th May 2009 Gold Prices

Spot gold prices surged yesterday gaining $12.83 to settle at $925.80 per ounce on the back of a weaker dollar and and traders noting that net long positions in Comex gold futures had increased slightly for the week ending 5th May – up by 891 contracts to 129991 – the highest level in five weeks.  In addition fears that inflation will return in due course as the global economy recovers also helped to push up the price of gold.  From a technical perspective yesterday’s wide spread up bar added significant momentum to the bullish tone for gold prices supported by all three moving averages with both the 9 and 14 day now crossing the 40 providing yet further evidence of a sustained move higher to re-test the $929 region last seen on April 2nd.   As we are now trading in an area of significant resistance created during the consolidation of March we will need to see a breakout firstly through the $935 area and secondly above the $950 to be sure that this current trend will continue in the medium term.  If so, we could then see an attempt to re-test the highs of early March in the psychological $1000 per ounce price point in due course.  My trading suggestion today is as of yesterday which is to look for small long positions on an inter-day basis with tight stop losses and small profits.

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

Support:    $911.25 (yesterday’s low)                                   Resistance: $933.20 (high of 01/04/09)

Support:    $895.30 (low of 06/05/09)                                   Resistance: $929.12 (high of 02/04/09)

Support:    $884.05 (low of 04/05/09)                                   Resistance: $927.50 (yesterday’s high)