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FxWirePro: Gold Daily Outlook

Gold is trading flat after 3 days of consecutive upside.The yellow metal has jumped more than $8 yesterday and hits high of $1327.70.Gold was one the best performer in Jan and has jumped more than $50 on account of dovish Fed and global uncertainty.

 

The major three factors that drive gold prices

 US dollar Index: Neutral. DXY has formed a minor bottom around 96.65 and shown a minor jump. The index’s major resistance is around 97.71 and any break above targets 98/98.60.(Neutral for gold).

USD/JPY: Weak. USD/JPY has shown a minor recovery after forming a bottom around 110.25.It is currently trading around 110.60. The near term resistance is around 111.40 and any break above targets 112.Slightly negative for gold.

 US 10 year yield : US 10 year yield is consolidating in narrow range after hitting low of 2.641% on Feb 18th 2019.The yield has been trading weak for past two months and lost nearly 22% from high of 3.25%.It is currently trading around 2.67%.slightly positive for Gold.

 US 2 year yield: It is trading around 2.512%. 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

On the higher side, yellow metal is facing near term resistance around $1330 and break above will take the gold to next level till $1335.The yellow metal should break above $1335 for further bullishness.

The near term support is around $1313 (20- day MA) and any violation below will drag the commodity down till $1307 (5- W MA)/$1300.Any break below $1276 confirms minor weakness.

It is good to buy on dips around $1312-13 with SL around $1305 for the TP of $1334.

 

 

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