Gold has halted its minor weakness and jumped more than $10 on global growth concern and yield curve inversion. US 10 yer yield hits low of 2.37% lowest since Dec 2017.US 3 month and 10 year yield has inverted for first time since 2007. It hits high of $1324.50 and is currently trading around $1318.90. Gold was one the best performer in Jan and has jumped more than $50 on account of dovish Fed and global uncertainty.
The major three factors that drive gold prices
US dollar Index: Bullish. DXY has declined slightly after a more than 100 pips jump from low of 95.74.But overall trend is slightly bullish as long as support 95.75.Any close below targets 95.16/95.(negative for gold).
USD/JPY: weak. USD/JPY has halted its 4 days of downtrend and shown a minor recovery. Overall trend is still weak as long as resistance 110.43 holds.It is currently trading around 110.08. The near term support is around 109.55 and any break below targets 109/108.55. Positive for gold.
US 10 year yield : US 10 year yield hits low of 2.37% lowest level since 2017 and has inverted below 3-month for the first time since 2007.The yield has been trading weak for past two months and lost nearly 25% from high of 3.25%.It is currently trading around 2.443%. positive for Gold.
US 2 year yield: It is trading around 2.28%. The spread between US 10 year and 2 year has declined to 16bpbs 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, near term resistance is around $1323 (61.8% fib) and any break above targets $1330/$1336.The yellow metal should break above $1346 for further bullishness.Any break above will take the gold till $1365.
The near term support is around $1310 (50- day MA) and any violation below will drag the commodity down till $1303/$1298/$1292/$1285.
It is good to buy on dips around $1312-13 with SL around $1307 for the TP of $1323/$1330.


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