Gold halts 2-day rally and shown a minor decline on account of slight recovery in US dollar.The decline in US 10 year bond yield to support price at lower level.It is currently trading around $1235.54
The major three factors that drive gold prices
US dollar Index: Weak. DXY has shown a good recovery of more than 770 pips after hitting low of 96.38 yesterday.The index is facing strong support around 96.60 and any violation below targets 96/95.68.US Dollar index’s previous high is around 97.69 and any further bullishness only above that level.It is currently trading around 97.08.(Negative for gold).
USD/JPY: Neutral. The pair has lost nearly 100 pips from yesterday high of 113.66. It is currently trading around 112.93. The near term support is around 112.40 and any break below targets 112/11.37. positive for gold.
US 10 year yield : US 10 year yield is trading weak and holding well below 200 day MA. It hits low of 2.88% and is currently trading around 2.912%.Positive for Gold.
US 2 year yield: It is trading slightly higher and spread between US 10 year and 2 year has decreased sharply to 11bpbs 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 and any convincing break above $1243 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 $1232-33 with SL around $1227 for the TP of $1243/$1250.


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