Spot Gold Prices - Daily Candle Chart February 10th 2009

Spot gold closed sharply higher yesterday crossing above the 9 and 14 day moving averages and gaining in excess of $20.00 for the day. The driver behind it was a significant sell off in the Dow following the lack of details in Treasury Secretary’s comments unveiling the latest bank bailout plans. Recently spot gold has dismissed the usual inverse relationship to the US dollar so it is likely that at least for the short term gold will look at equities markets for its next direction. The bullish engulfing candle has now added fresh impetus to the bullish tone for spot gold prices, and from here we should expect to see a strong move upwards in the next few days, based on this excellent buy signal. My suggested trade for today is therefore long positions with a stop loss below the support level at $870 – $875 per ounce.
The short term trend is sideways while the medium and long term trends are bullish.

Support:    $890.40 (yesterday’s low)                                    Resistance: $927.07 (high of 02/02/09)

Support:    $881.85 (low of 28/01/09)                                    Resistance: $924.20 (high of 05/02/09)

Support:    $873.95 (low of 29/01/09)                                    Resistance: $918.20 (yesterday’s high)