FxWirePro- Currency Strength Index (4- Hour chart)- Currency pairs to watch (EURUSD and AUDUSD) for the day)
FxWirePro- Gold Daily Outlook
Ichimoku Analysis (4-hour Chart)
Gold surged above $1700 on declining US treasury yield. The demand for safe-haven assets due to jitter in financial markets pushing the yellow metal higher. Following Credit Suisse UBS's 5-year credit default spread also rose 12 basis points to 118 bpbs, the highest level since 2013. The DXY is trading lower for the fourth consecutive day and lost more than 300 pips on profit booking.
US 10-year yield lost more than 11% after hitting 4.019%, the highest level in 12 years. The US 10 and 2-year spread widened to -43 basis points from -41 bpbs.
US ISM manufacturing PMI came at 50.9 in Sep, the lowest level since May 2020.
According to the CME Fed watch tool, the probability of a 75 bpbs rate hike in Nov declined to 53% from 62.5% a week ago.
Factors to watch for gold price action-
Global stock market- Bullish (negative for gold)
US dollar index – Bearish (positive for gold)
US10-year bond yield- Bearish (positive for gold)
The near–term support is around $1677, a close below targets $1665/$1650.The yellow metal faces minor resistance around $1720, the breach above will take it to the next level of $17401770/$1800. Minor bullish continuation only if it breaks $1740.
It is good to buy on dips around $1678 with SL around $1660 for TP of $1740.