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FxWirePro: Gold Daily Outlook

Gold as shown a minor recovery of nearly $10 from low of $1276. The yellow metal has lost its shine due to easing US-China trade tension. It is currently trading around $1284.

The major three factors that drive gold prices

 US dollar Index: strong. DXY halted its 7 day of winning streak and and declined nearly 20 pips from high of 96.48. The index is facing trend line resistance around 96.50 and a break above targets 96.95/97.75.On the higher side any break above 97.75 confirms bullish continuation.(slightly negative for gold).

USD/JPY: Strong. USD/JPY has recovered more than 50 pips from low of 109.14. The pair should break above 110 for further bullishness. It is currently trading around 109.70.Slightly negative for gold.

 US 10 year yield : US 10 year yield has lost nearly 2% from high of 2.79%. The yield jumped more than 10% after forming a minor bottom around 2.54%.The yield has declined sharply in past two months and lost nearly 22% from high of 3.25%.It is currently trading around 2.75%.Slightly negative for Gold.

 US 2 year yield: It is trading around 2.59%. The spread between US 10 year and 2 year has declined to 16bpbs from 30 basis point. The spread between 5 year and 2- year yield has inverted (US 2 year yield trading above US 5 year yield).

Gold technical

Major support $1183

 On the higher side, yellow metal is facing strong psychological resistance around $1300 and break above will take the gold to next level till $1320.

The near term support is around $1276 and any violation below will drag the commodity down till $1270/$1266/$1252/$1242 /$1234.

 It is good to sell on rallies around $1286-87 with SL around $1294 for the TP of $1260/$1250.

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