FxWirePro: Gold Daily Outlook

Major support- $1517

Gold has recovered more than $25 after a minor profit booking. The escalation of the US-China trade war and declining US bond yield is supporting yellow metal. US ISM manufacturing index came at 49.2 in August compared to 51.2 in Jul and reading below 50 indicates contraction. The yellow metal hits high of $1549 and is currently trading around $1543.35.

US 10 year bond yield lost more than 7% and hits a fresh 3-year low. It is currently trading at 1.473% US 2 year yield at 1.462%. The yield curve inversion is gone away and spread between US 2 and the 10-year yield is now widened t 1 bps from - 5 bps. Any break above 1.59% confirms minor bullishness.

On the lower side, near term support is around $1514-17 (23.6% fib) and any violation below will drag the yellow metal down till $1500/ $1480 (7- W MA)/$1457 (7- W MA). The minor support is around $1530/$1520.

The near term resistance is around $1555 and the indicative break above targets $1575/$1600.

It is good to buy on dips around $1500 with SL around $1480 for the TP of $1560.