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FxWirePro: Gold trades flat, markets eye US Non Farm Payroll

Gold trades flat after hitting high of $1244 level. The declining US 10 year yield and minor weakness in US dollar. It is currently trading around $1239.66. Markets eye US NFP data for further direction.

The major three factors that drive gold prices

 US dollar Index: weak. DXY has minor recovery from low of 96.55. The index should break below 96.28 (50- day MA) and any further weakness only below that level.US Dollar index’s previous high is around 97.69 and any further bullishness only above that level.It is currently trading around 96.86.(Positive for gold).

USD/JPY: Weak. The pair hits low of 112.23 and shown a minor recovery. It is currently trading around 112.91. The near term support is around 112 and any break below targets 111.37/111. Slightly negative for gold.

 US 10 year yield : US 10 year yield is trading weak and lost more than 3.5% yesterday. it hits low of 2.81% and shown a good jump till 2.90%.Positive for Gold.

 US 2 year yield: It is trading slightly lower and spread between US 10 year and 2 year has decreased sharply to 12bpbs from 30 bpbs. The spread between 5 year and 2- year yield has inverted for the first time since 2007.

Gold technical

Major support $1183

Major resistance - $1243

 On the higher side, major resistance is around $1243 (200- day MA) and any convincing close above will take the commodity till $1250/$1260.

The near term support is around $1230 and any violation below will drag the commodity down till $1219 (55-day EMA)/$1211.

 It is good to buy on dips around $1233-34 with SL around $1227 for the TP of $1243/$1250.

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