Spot Gold Prices - Daily Candle Chart 18th February 2009

As safe haven buying continued yesterday spot gold prices rallied sharply touching its highest point since July 2008 at $974.22/oz level, with a wide spread up bar on the day, so I hope you followed my advice of yesterday and made money on the trade. For today, we  say see some profit taking following such a strong move, but if you do have your positions open from yesterday, I would keep them open for today and move your stop loss up to the $940 region, as we approach the $1000 per ounce target. With all the moving averages pointing to higher prices, there is no reason to suppose that the move will not continue today.

The move yesterday was significant in a range of nearly $35 and was triggered by the uncertainty in the financial markets as investors fled equities for gold. So the big sell off in equities probably came as a reminder that in troubled times gold can be used as a hedge against weakness in other assets and with stocks expected to retest their November 2008 lows in the coming weeks the precious metal is in a very favourable position.

The short, medium and long term trends are all bullish.

Support:    $939.70 (yesterday’s low)                                    Resistance: $1000.00 (psychological level)

Support:    $935.51 (9 day moving average)                               Resistance: $981.45 (high of 16/07/08)

Support:    $931.90 (low of 13/02/09)                                    Resistance: $974.22 (yesterday’s high)