Gold is trading higher for past 8 trading session and jumped nearly $30 on account of global stock market turmoil. It is currently trading around $1286.76.
The major three factors that drive gold prices
US dollar Index: neutral. DXY is trading weak and has broken support 96.05.The index hits low of 95.65 and is currently trading around 95.85.US dollar index’s is trading below major support 96 and this confirms minor trend reversal and decline till 95 likely (positive for gold).
USD/JPY: weak . USDJPY has broken major support 110 and declined more than 50 pips for the intraday. It is trading well below major support 110 and a decline till 108 is possible. It is currently trading around 109.15. positive for gold.
US 10 year yield : US 10 year yield is trading weak for 3rd consecutive week and lost nearly 15% from high of 3.25%. It is currently trading around 2.68%.positive for Gold.
US 2 year yield: It is trading around 2.50%.The spread between US 10 year and 2 year has declined to 10bpbs from 30 basis point. The spread between 5 year and 2- year yield has changed from inversion to normal (US 5 year yield trading above US2 year yield).
Gold technical
Major support $1183
On the higher side, yellow metal broken major resistance $1280 and this confirms minor trend reversal and a jump till $1300/$1320.
The near term support is around $1266 (23.6% fib) and any violation below will drag the commodity down till $1252/$1242 /$1234.
It is good to buy on dips around $1270 with SL around $1253 for the TP of $1325.


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