FxWirePro: Gold downside capped by 23.6% fib, good to buy on dips

Ichimoku Analysis (4 Hour chart)

Tenken-Sen- $1608

Kijun-Sen- $1547

Gold has shown a minor decline after hitting a high of $1640. The slight improvement in demand for riskier assets is putting pressure on yellow metal at higher levels.  US stocks surged for 2nd consecutive days with Dow Jones 21200 (2.39%) and S&P500 2475 (1.15%).  The U.S Senate has passed a $2tn coronavirus disaster bill. DXY continues to trade lower after forming a top around 102.99 and is currently trading around 100.75.

The total number of people infected due to coronavirus increased to 417962 and the death toll rose in Italy by 743 yesterday to 6820. US 10-year yield has lost nearly 10% after minor recovery of 30% till recovered more than 30% from low of 0.69%, the spread between US 10-year and 2-year has narrowed to 48 bps from 70 bps.

Technically, near term support is around $1595 and any violation below will drag the gold down till $1578/$1545.

On the higher side, immediate resistance is around $1625 and indicative break above will take the gold till $1640/$1660.

It is good to buy on dips around $1575-80 with SL around $1550 for the TP of $1700.

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