FxWirePro: Gold breaks upward sloping resistance, jump till $1300 likely

Gold is trading higher for past 7 days and jumped more than $30 on account of global stock market turmoil. It is currently trading around $1278.

The major three factors that drive gold prices

 US dollar Index: neutral. DXY is trading lower for two consecutive days and lost nearly 100 pips.The index hits low of 96.19 and is currently trading around 96.24..US dollar index’s major support is around 96.13 (89-day EMA) any break below confirms further weakness and a decline till 95 is possible (positive for gold).

USD/JPY: weak . USDJPY has lost more than 100 pips in past two trading session after a forming a minor top around 111.40. It is facing strong support around 110 and any close below will confirm major weakness. It is currently trading around 110.30. positive for gold.

 US 10 year yield : US 10 year yield is trading weak for 8th consecutive week and lost nearly 15% from high of 3.25%. It is currently trading around 2.76%.positive for Gold.

 US 2 year yield: It is trading around 2.57%.The spread between US 10 year and 2 year has slightly increased from 13bpbs point to 20 basis point. The spread between 5 year and 2- year yield has changed from inversion to normal (US 5 year yield trading above US2 year yield).

Gold technical

Major support $1183

 On the higher side, yellow metal broken major resistance $1273and this confirms minor trend reversal and a jump till $1289/$1300/$1320.

The near term support is around $1253 (23.6% fib) and any violation below will drag the commodity down till $1242 /$1234.

 It is good to buy on dips around $1270 with SL around $1253 for the TP of $1325.