Spot Gold Prices Daily Chart - January 20th 2009

As I expected yesterday’s trading session in spot gold was dominated by light volumes with the US out on holiday for Martin Luther King Day. The uncertainty surrounding the global financial sector that triggered Friday’s rally was also behind gold’s initial strength, but later on a strong US currency proved too much and spot gold prices declined, finishing lower for the day. Today the price of gold is likely to remain volatile but could get a boost from optimistic sentiment following the inauguration of Barack Obama.

In early trading this morning gold prices declined in Asia for a second day, as the US dollar advanced against the euro, thereby reducing the metal’s appeal as an investment alternative and infaltion hedge. The dollar index on ICE futures climbed for a second day after the UK pound fell, and the Euro slid on German investor confidence ( or lack of!)

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

Support:    $819.90 (low of 15/12/08)                                   Resistance: $851.80 (high of 22/12/08)

Support:    $815.35 (low of 16/01/09)                                   Resistance: $846.00 (yesterday’s high)

Support:    $806.40 (low of 14/01/09)                                   Resistance: $843.00 (14 day moving average)