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Home Markets Markets Gold prices: Can upward trend be maintained?
Gold prices: Can upward trend be maintained? PDF Print E-mail
Written by Will Peters   
Thursday, 06 May 2010 09:43
A big “hanging man” candlestick which is meant to indicate the reversal of an uptrend has been recorded.



The spot gold price is at 1177 at 10:35 in London.

Simon Denham at Capital Spreads says gold prices did find the support at previous resistance yesterday but not before making a dramatic run lower shaking out a number of bulls only for it to recover to back above 1170.

"This morning its at 1175, but yesterday’s price action formed a big “hanging man” candlestick which is meant to indicate the reversal of an uptrend, so it’ll be interesting to see if the move higher since min-March can be maintained," says Denham.

Gold ticked up on Thursday while holdings on the world's biggest bullion-backed ETF hit another record on euro-zone debt crisis fears, which sent the euro to a one-year low and sparked a sell-off in stocks.

Gold priced in euro struck a record as investors lost faith in the single currency and rushed to buy bullion, while silver, platinum and palladium bounced higher from Wednesday's lows.

"Gold is behaving more like a flight-to-safety product. There's a potential for gold to go up together with the U.S. dollar in this time of uncertainty," said Wong Eng Soon, an investment analyst at Phillip Futures in Singapore.

"The number one uncertainty is of course the contagious effect of the euro-zone fiscal deficit. The immediate target will be $1,200," said Wong, referring to a level last seen in December, when bullion struck record at $1,226.10 an ounce.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at a record of 1,166.002 tonnes as of May 5, up from 1,159.002 tonnes in the previous business day.


Oil prices take a battering


In other commodity news the oil price has really taken a battering, now back below the $80 which is a significant move to the downside.

"Bears will be eying up the $70 mark and after the last couple of day’s price action we could be there in a short space of time, but for bulls they will most likely be looking to add to long positions, particularly if the economic data continues to strengthen," says Denham.
Last Updated ( Thursday, 06 May 2010 09:45 )