Gold Sharply Higher, Moves Above 200 Day Moving Average
January 23rd, 2009Spot: +$45.20 @ $901.60 – $902.40
Via: Marketwatch:
Gold futures rallied to a three-week high Friday, as falling equities and worries about the global economy prompted investors to seek a safe haven.
Gold for February delivery gained $21.10, or 2.5%, to $879.90 an ounce in electronic trading on Globex.
Earlier, gold soared to an intraday high of $882 an ounce, its highest level since Jan. 1.
Gold gained “on heavy safe-haven demand as sentiment deteriorated across global equity markets,” said analysts at Action Economics.
On Wall Street, U.S. stocks posted losses, with the Dow Jones Industrial Average dropping 158 points, or 2%. In more worrying economic news, Britain’s economy contracted at its fastest quarterly pace in nearly 29 years during the final three months of 2008, government data revealed Friday, marking a result even worse than most economists’ pessimistic expectations.
Gross domestic product shrank by 1.5% in the final three months of the year, following a 0.6% quarterly contraction in the July-to-September period, the office for national statistics said in its initial estimate.
The British pound plunged to a 23-year low Friday against the dollar, undermined as data confirmed the U.K. economy fell into a deep and potentially long-lasting recession in the final three months of 2008. See Currencies.
“The true secular measure of currencies is gauged against gold,” as the metal extends to fresh record highs against the British pound, three-month highs against the euro, three-week highs against the U.S. dollar and only three-day highs against the rallying yen, said Ashraf Laidi, chief market strategist at CMC Markets.
Gold has breached well above its 200-day moving average against both the euro and the dollar, but the metal remains 11% lower than its 200-day moving average in yen terms, Laidi said in a research note.
Expecting some kind of correction, though a weak one, going into next week. After that, we´ll be in wave 3 of wave 3 of wave 3 of wave 3, just look at the fractals on the different time stamps going out all the way to the 1-year. Also, the Awesome Oscillator just crossed. Maybe that correction won´t come until after it pushes well into the 900s, setting us up for a wave 3 that push new highs.