FxWirePro: Gold trades steady on weak global stock market, good to buy on dips

Gold is consolidating after hitting high of $1225.32 on account slight weakness in US dollar and global stocks sell-off.

The major three factors that drive gold prices

 US dollar Index: weak for intraday. DXY has lost more than 150 pips from the high of 97.69. It is currently trading around 96.22.The near term support is around 97.05 and any break above targets 997.40/97.70. (S neutral for gold).

USD/JPY: Weak . The pair is trading slightly weak for 4th consecutive days. USDJPY has broken major support 113 (20-day MA )at 113 It is currently trading around 112.55. The near term support is around 112.16 (89- day EMA) and any break below targets 111.37. Slightly positive for gold.

 US 10 year yield : US 10 year yield is trading weak and declined more than 6% from high of 3.25%.It faces strong support around 3.07 (89- day EMA) .Any further weakness only if it breaks convincingly below 3.07%. It is currently trading around 3.066%. Slightly positive for Gold.

 US 2 year yield: It is trading lower after hitting hitting fresh multi-year high at 2.98% and lost more than 6.5%.The spread between US 10 year and 2 year has decreased from 30bpbs to 26bpbs.

Gold technical

Major support $1183

Major resistance - $1240

 The yellow metal is consolidating after hitting high of $1225. On the higher side, major resistance is around $1226 (61.8% fib) and any break above $1225 will take the commodity till $1230/$1236 .It should break above $1243 (Oct 26th 2018 high) for bullish continuation.

The near term support is around $1190 and any violation below will drag the commodity down till $1178/$1160.The minor support is around $1209/$1200.

 It is good to buy on dips around $1215 with SL around $1209 for the TP of $1230.