Gold is consolidating narrow range between $1285 and $1294.50 for past three trading days. US dollar is trading lower on profit booking and lost more than 50 pips from high of 97.52.
The major three factors that drive gold prices
US dollar Index: Bearish. DXY is trading lower for 2nd consecutive day and lost more than 50 pips form high of 97.52.It hits low of 96.96 and is currently trading around 97.04. The index has formed a minor bottom around 95.75 and jumped more than 170 pips .The near term support is around 96.79 and any close below targets 96.36/95.75.(positive for gold).
USD/JPY: weak. USD/JPY gained sharply after forming a minor bottom around 110.01 and jumped more than 150 pips.It has closed above 200- day MA and any jump till 112/112.20 likely. negative for gold.
US 10 year yield : US 10 year yield continues to trade higher and jumped more than 2.5% yesterday. The yield has been trading weak for past two months and lost nearly 25% from high of 3.25%.It is currently trading around 2.51%. Negative for Gold.
US 2 year yield: It is trading around 2.34%. The spread between US 10 year and 2 year has declined to 17bpbs from 30 basis point. The spread between 3 month and 10- year yield inversion has reversed (US 10 year yield trading above US 3 month).
Gold technical
On the higher side, near term resistance is around $1300 and any convincing break above targets $1309/$1312/$1316.The yellow metal should break above $1324 for further bullishness.
The near term support is around $1280 and any convincing below will drag the commodity down till $1269/$1260.
It is good to sell on rallies around $1300 with SL around $1305 for the TP of $1280/$1271
