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FxWirePro: Gold trades steady despite strong US dollar; weakness in global stock market supports yellow metal, good to buy on dips

The major three factors that drive gold prices

 US dollar Index: Bullish. DXY has jumped sharply yesterday and has broken trend line resistance at 95.95. it is hovering around that level. The near term intraday trend reversal level is around 96.16 and any break above targets 96.32/97. It should break above 97 for further bullishness. ( Slightly negative for gold).

 USD/JPY: weak . The pair was trading volatile yesterday and shown a minor recovery after hitting low of 111.95. Any further weakness cane be seen below 111.50. The near term resistance is around 112.78 and any break above targets 113/113.48. Slightly negative for gold.

 

US 10 year yield : US 10 year yield is trading slightly lower after hitting high of 3.218% yesterday.It is currently trading around 3.17%. Negative for Gold.

 

US 2 year yield: It shown a minor recovery around 2% till 2.912% .The spread between US 10 year and 2 year has increased from 22bpbs to 31bpbs.

 Gold technical

Major support $1183

Major resistance - $1217

 The yellow metal is trading flat after hitting low of $1220. Global stock market has shown a minor sell off yesterday. But US dollar is trading higher and putting pressure on yellow metal.

On the higher side, any break above $1234 (200- WMA) will take the commodity till $1240/$1265 .It should close above $1265 for bullish continuation.

The near term support is around $1217 (89- day EMA) and any violation below will drag the commodity down till $1211/$1204.

 It is good to buy on dips around $1217 with SL around $1210 for the TP of $1234/$1240.

 

 

 

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