FxWirePro: Gold trades higher on weak US dollar, good to buy on dips

Major resistance- $1217

The major three factors that drive gold prices

US dollar Index: Weak. DXY has once again declined after hitting high of 95.56 .The index has broken one week low of 94.87 and declined till 94.73.Any close below 94.85 (55- day EMA) targets 94.31/94. The index has almost formed a double top around 95.70-75 and any major bullishness only above that support 94.31 holds. (Slightly positive for gold).

USD/JPY: Trend slightly Bullish. The pair hits low of 110.38 and shown a good recovery of more than 100 pips. Short term trend is slightly bullish as long as support 109.77 holds . Any daily close below 109.78 confirms bearish continuation and a dip till 109/108 likely. Slightly positive for gold.

US 10 year yield : It has jumped more than 4% from the Thursday’s low of 2.865 on hopes of further rate hike. It is currently trading around 2.969%. Any break above 3.0160% confirms further bullishness.

US 2 year yield: It hits 10 year high at 2.76%.The spread between US 10 year and 2 year has reduced to 21 bpbs from 35 bpbs.

Gold technical

Major support $1183

Major resistance - $1217

The yellow metal has jumped more than $10 from the low of $1192.76 on weak US dollar. It hits high of $1208 and it is currently trading around $1204.94. The trend is slightly bullish as long as support $1192 holds.

On the higher side, any break above $1214 will take the commodity till $1217/$1224/$1230.

It is good to buy on dips around $1200-01 with SL around $1190 for the TP of $1217/$1224.