Gold was trading lower for past 5 days and lost more than $35 on account of strength in US dollar.It has made temporary top around $1346 and lost nearly $60. It hits low of $1286 and is currently trading around $1287.65. Gold was one the best performer and jumped more than $120 from Dec 2018 low of $1220 on account of dovish Fed and global uncertainty.
The major three factors that drive gold prices
US dollar Index: Bullish. DXY is trading higher after a minor consolidation for past two days. It has jumped more than 160 pips form low of 95.74.But overall trend is bullish as long as support 96.79 holds.Any close below targets 96.36/95.75.(negative for gold).
USD/JPY: weak. USD/JPY gained sharply after forming a minor bottom around 110.01 and jumped more than 150 pips.It is facing strong resistance around 111.37 (200-day MA) and nay break above targets 112. negative for gold.
US 10 year yield : US 10 year yield has jumped sharply nearly 7% from 14 month low of 2.34%.The yield has been trading weak for past two months and lost nearly 25% from high of 3.25%.It is currently trading around 2.35%. positive for Gold.
US 2 year yield: It is trading around 2.306%. The spread between US 10 year and 2 year has declined to 18bpbs from 30 basis point. The spread between 3 month and 10- year yield inversion has reversed (US 10 year yield trading above US 3 month).
Gold technical
On the higher side, near term resistance is around $1300 and any convincing break above targets $1309/$1312/$1316.The yellow metal should break above $1324 for further bullishness.
The near term support is around $1280 and any convincing below will drag the commodity down till $1269/$1260.
It is good to sell on rallies around $1293-94 with SL around $1300 for the TP of $1280/$1271


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