Gold is trading lower for 3rd consecutive days and lost more than $20 from previous week high of $1310 on easing geopolitical tension.
The major three factors that drive gold prices
US dollar Index: Bearish. DXY is trading weak and lost more than 60 pips in previous week.The index has broken major support 96.85 and declined till 96.73. The near term support is around 96.73 (55- day EMA) and any close below targets 96.36/95.75.(positive for gold).
USD/JPY: Strong . USD/JPY has recovered sharply more than 100 pips from low of 110.89. The near term resistance is around 112.20 and break above targets 112.50/113.Negative for gold.
US 10 year yield : US 10 year yield rose more than 3.5% after Fed did not unwind its balance sheet.The near term resistance is around 2.603% and any break above targets 2.689%/2.735%.Overall US yield jumped nearly 10% from 14 month low of 2.34%.It is currently trading around 2.559%. Negative for Gold.
US 2 year yield: It is trading around 2.40%. The spread between US 10 year and 2 year has declined to 15bpbs 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 $1308/$1312. 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 $1295-97 with SL around $1304 for the TP of $1280.


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