Gold Prices - Gold Spot Price Daily Chart 24th April 2009

Not unsurprisingly investor fears and worries are continuing to push up spot gold prices which yesterday crossed the psychological $900 per ounce price point as I outlined in yesterday’s market commentary, closing the day above both this level and also the 9 and 14 day moving averages.  More importantly the close of the day finished marginally above the resistance level in this region suggesting that we could now see a return of bullish sentiment reversing the declines of the last 8 weeks.  Indeed this sentiment seems to have continued in this morning’s early trading with gold prices now moving marginally above the 40 day moving average adding some weight to this view, but only if today’s close finishes above all three averages.   We may see some additional support to the price of gold from a weaker US dollar which seems to be indicated by the Dollar Index in the short term.  In addition investor concerns about the stress test results and the auto industry, in particular the situation with regard to Chrysler24t is persuading many to hold onto their positions in gold exchange traded funds.  Indeed the World Gold Council has confirmed that inflows into gold ETFs continued to grow throughout this quarter, with investors buying a record 469 tonnes of gold, dwarfing the previous quarterly record of 145 tonnes, set in the third quarter of last year. This took the total amount of gold in ETFs to 1,658 tonnes, worth US$48.6 billion.

My trading suggestion for today is to continue as per yesterday’s suggestion and that is to lock in any profits from yesterday’s trading and to build further small long positions intra day with tight stop losses and small profit targets, always bearing in mind that ahead of the weekend the market may be subject to squaring of positions by gold traders.

The short term and medium term are sideways, with the long term outlook bullish.

Support:    $889.45 (yesterday’s low)                                   Resistance: $929.12 (high of 02/04/09)

Support:    $881.40 (low of 22/04/09)                                   Resistance: $922.77 (high of 04/03/09)

Support:    $864.25 (low of 20/04/09)                                   Resistance: $909.15 (yesterday’s high)