Gold has halted its one week of downtrend and jumped more than $20 on account of slight weakness in US dollar index.It is currently trading around $1299.
The major three factors that drive gold prices
US dollar Index: Bearish. DXY has once again declined after a minor jump till 97.47. The index has formed a double top around 97.47-97.52 and is currently trading around 97. The index has formed a minor bottom around 95.75 and jumped more than 170 pips .The near term support is around 96.79 and any close below targets 96.36/95.75.(positive for gold).
USD/JPY: Strong . USD/JPY has lost nearly 50 pips from high of 111.82.Any daily close below below 200- day MA confirms further weakness.Positive for gold.
US 10 year yield : US 10 year yield trades higher and holding above 20- day MA.The near term resistance is around 2.557% and any break above targets 2.609%/2.689%. The yield has been trading weak for past two months and lost nearly 25% from high of 3.25%.It is currently trading around 2.524%. slightly positive for Gold.
US 2 year yield: It is trading around 2.368%. The spread between US 10 year and 2 year has declined to 16bpbs 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 buy on dips $1295-96 with SL around $1289 for the TP of $1309/$1312.
