By Russell Glaser – The price of spot gold rose to a new record high as the bullish streak in the commodity continues. However, the commodity was unable to hold the gains through the New York trading session and a possible reversal pattern has formed that could signal a change in the long term trend.
Spot gold prices climbed to a record high of $1251.75 before retreating to its opening day price at $1237.70.
As the commodity closed on its opening day price, a long-legged doji candlestick has formed. This presents a possible reversal signal in the trend of the commodity.
The doji candlestick pattern was formed at a significant price move in the commodity as the price set an all time high yesterday. This only magnifies the significance of the doji candlestick and should serve as a warning of a top in the market and a shift in the trend.
It should also be noted that the doji appears following a long bullish candle from Monday’s trading session. This is emphasizes the forewarning that a top is approaching
More conservative traders may want to couple the signal with another technical indicator in order to verify a change is actually occurring in the trend, however the Japanese candlestick pattern should certainly not be ignored.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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