Spot Gold Prices - Daily Chart 25th February 2009

The profit taking continued yesterday with spot  gold losing in excess of 26 dollars and breaking below the 9 day moving average with a wide spread down bar on the day. The move was largely attributed to comments by Federal Reserve Chairman Ben Bernanke who forecast that ‘the US recession would end in 2009 and recover in 2010 if government stimulus measures work’. Strange how such a small word as ‘if’ can have such a significant impact on the markets! The follow up was a boost in confidence prompting a rally in US equities markets which in turn triggered long liquidation in gold. My personal view is simply that this is a temporary blip in the bull move, and by the end of the week, I suspect that all markets will have forgotten Bernanke’s statement and moved on to other news and events. For the time being however we have to be cautious in our day trading, but yesterday’s down bar may have given us an excellent entry point to buy into the market for today, particularly if we see further falls this morning. I would therefore suggest you wait and see, and then buy on any reaction back up with a wide stop loss and certainly below the $925 region.

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

Support:    $958.75 (yesterday’s low)                                   Resistance: $995.65 (high of 24/02/09)

Support:    $951.09 (14 day moving average)                             Resistance: $987.28 (high of 18/02/09)

Support:    $939.70 (low of 17/02/09)                                   Resistance: $968.27 (9 day moving average)