Gold is consolidating after a minor recovery of nearly $10 from low of $1276. The yellow metal has lost its shine due to easing US-China trade tension but Brexit uncertainty and global growth concerns supporting gold at lower levels. It is currently trading around $1281.80.
The major three factors that drive gold prices
US dollar Index: strong. DXY halted its 7 day of winning streak and and declined nearly 40 pips from high of 96.48. The index is facing trend line resistance around 96.50 and a break above targets 96.95/97.75.On the higher side any break above 97.75 confirms bullish continuation.(slightly negative for gold).
USD/JPY: Strong. USD/JPY has shown a minor selling after hitting high of 109.99. The pair should break above 110 for further bullishness. It is currently trading around 109.63.Slightly negative for gold.
US 10 year yield : US 10 year yield has lost nearly 2% from high of 2.79%. The yield jumped more than 10% after forming a minor bottom around 2.54%.The yield has declined sharply in past two months and lost nearly 22% from high of 3.25%.It is currently trading around 2.746%.Slightly negative for Gold.
US 2 year yield: It is trading around 2.59%. 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
Major support $1183
On the higher side, yellow metal is facing strong psychological resistance around $1300 and break above will take the gold to next level till $1320.
The near term support is around $1276 and any violation below will drag the commodity down till $1270/$1266/$1252/$1242 /$1234.
It is good to sell on rallies around $1286-87 with SL around $1294 for the TP of $1260/$1250.


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