Candlestick pattern- Shooting star
Gold has halted its 2 week of winning streak and declined more than $20. The yellow metal jumped more $50 in month of Jan on account of dovish Fed and global uncertainty.
The major three factors that drive gold prices
US dollar Index: neutral. DXY is trading higher for 3rd consecutive day. The index has taken support near 300- day EMA and jumped more than 50 pips from the low.Any break below 94.98 (300- day EMA) confirms bearish continuation and a dip till 93.80 is possible.(negative for gold).
USD/JPY: Weak. USD/JPY has recovered sharply more than 100 pips from low of 108.49. The pair’s near term resistance is around 110 and any violation below targets 111/112.It is currently trading around 109.60.Slightly negative for gold.
US 10 year yield : US 10 year yield has halted its down trend and jumped more than 3% from low of 2.616%.The yield has been trading weak for past two months and lost nearly 22% from high of 3.25%.It is currently trading around 2.69%.Positive for Gold.
US 2 year yield: It is trading around 2.518%. The spread between US 10 year and 2 year has declined to 17bpbs 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 resistance around $1335 and break above will take the gold to next level till $1350/$1360.
The near term support is around $1311 and any violation below will drag the commodity down till $1300/$1295.Any break below $1276 confirms minor weakness.
It is good to sell on rallies around $1317-18 with SL around $1325 for the TP of $1300.


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