Spot Gold Prices - Daily Candle Chart 9th February 2009

Spot gold prices closed slightly higher on Friday with a doji cross, following the shooting star candle of Thursday, all of which is adding weight to the bearish engulfing candle of Tuesday which I highlighted last week. With prices now touching and starting to cross the 9 day moving average, this is adding to my view that in the short term we may see spot gold prices fall in the next few days, but only if the support area at $900 is penetrated in any significant way. After recent gains, market participants decided to take their profits ahead of weekend with the details of the stimulus package still being debated. The move in the US dollar didn’t provide much of a hint regarding the future direction of gold prices, which could be set to take a breather after failing to breach resistance just under $930/oz. My suggested trades for today would therefore be to attempt small short positions with a stop loss above the last high of $935.

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

Support:    $903.40 (Friday’s low)                                      Resistance: $927.07 (high of 02/02/09)

Support:    $900.88 (14 day moving average)                              Resistance: $924.20 (high of 05/02/09)

Support:    $881.85 (low of 28/01/09)                                    Resistance: $920.10 (Friday’s high)