Gold has halted its 6 days of downtrend and shown a minor jump of nearly $8 on account of slight weakness in US dollar.It has made temporary top around $1346 and lost nearly $60. It hits low of $1285.36 and is currently trading around $1293.30. Gold was one the best performer and jumped more than $120 from Dec 2018 low of $1220 on account of dovish Fed and global uncertainty.
The major three factors that drive gold prices
US dollar Index: Bearish. DXY has once again declined after showing a jump till 97.52 level.It hits intraday low of 97.17 and is currently trading around 97.18. The index ha formed a minor bottom around 95.75 and jumped more than 170 pips .The near term support is around 96.79 and any close below targets 96.36/95.75.(negative for gold).
USD/JPY: weak. USD/JPY gained sharply after forming a minor bottom around 110.01 and jumped more than 150 pips.It is trading slightly above 200- day MA around 111.46 and jump till 112/112.20. negative for gold.
US 10 year yield : US 10 year yield has jumped sharply nearly 7% from 14 month low of 2.34%.The yield has been trading weak for past two months and lost nearly 25% from high of 3.25%.It is currently trading around 2.48%. Negative for Gold.
US 2 year yield: It is trading around 2.327%. The spread between US 10 year and 2 year has declined to 16bpbs from 30 basis point. The spread between 3 month and 10- year yield inversion has reversed (US 10 year yield trading above US 3 month).
Gold technical
On the higher side, near term resistance is around $1300 and any convincing break above targets $1309/$1312/$1316.The yellow metal should break above $1324 for further bullishness.
The near term support is around $1280 and any convincing below will drag the commodity down till $1269/$1260.
It is good to sell on rallies around $1300 with SL around $1305 for the TP of $1280/$1271
