Gold trades higher and jumped more than $10 yesterday after weaker than expected US Non Farm Payroll data. The declining US 10 year yield and minor weakness in US dollar is also supporting yellow metal. It is currently trading around $1249.60.
The major three factors that drive gold prices
US dollar Index: weak. DXY was trading weak for 3rd consecutive day. 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 96.42.(Positive for gold).
USD/JPY: Weak. The pair hits low of 112.23 and shown a minor recovery. It is currently trading around 112.41. 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% yesterday. it hits intraday low of 2.81% and currently trading around 2.83%.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 $1250 and any convincing break above targets $1260/$1265.
The near term support is around $1238-43 (23.6% fib and 200-day MA) and any violation below will drag the commodity down till $1229 (10-day MA)/$1221 (55- day EMA).
It is good to buy on dips around $1238-40 with SL around $1229 for the TP of $1264.


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