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Spot Gold Prices – Gold Price Chart 28th May 2009

Spot Gold Chart 28th May 2009

Spot gold prices fell over $6 yesterday settling at $946.15 per ounce as a result of a stronger US dollar and with markets still so uncertain about the global economy the precious metal will not have any difficulty in attracting fresh buyers on this temporary reversal which confirmed Tuesday’s hanging man signal.  From a technical perspective yesterday’s candle closed with a deep upper shadow and wide body, suggesting that the bears were in control, but it is interesting to note that despite the previous day’s candle both of these found support from the 9 day moving average with the low of each day bouncing off this key technical indicator.  Indeed in this morning’s trading we have seen the same trading pattern once again with the low of the session bouncing off the 9 day moving average.  This failure to penetrate the moving average is a positive sign for gold bulls but given that we have some very large markets closed in Asia for a national holiday, and coupled with the resistance level that we are currently trying to penetrate at the $950/$955 region my suggestion for today is to step aside and wait for one of the following – either a clear break above the consolidation of the past four days or a break down and below the 9 and 14 day moving averages.  Finally, it is a little too early to say whether the effect of the hanging man candle of Tuesday has been completely dissipated and hence my caution at present for trading gold.

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

Support:    $943.55 (yesterday’s low)                                   Resistance: $967.00 (high of 20/03/09)

Support:    $935.55 (low of 21/05/09)                                   Resistance: $962.50 (high of 19/03/09)

Support:    $929.60 (low of 06/03/09)                                   Resistance: $959.45 (yesterday’s high)