FxWirePro: Gold declines slightly on profit-booking, good to buy on dips

Gold has halted its 4-week of a bullish trend and shown a decline of more than $30 on profit booking. The slight easing of trade war tension between the US and China is putting pressure on Safe-haven demand assets like yen and gold. But declining yield and negative interest rates will support gold prices in the long run. The yellow metal hits low of $1525 and shown a minor jump from that level. It is currently trading around $1534.44.

US 10 year bond yield has recovered more than 6.5% after hitting a 3-year low of 1.44%. It is currently trading at 1.512%. The yield curve between US 10 year and 2-year got inverted which increases the chance of recession.

On the lower side, near term support is around $1514 (23.6% fib) and any violation below will drag the yellow metal down till $1500/ $1486 (21- day MA)/$1460.The major weakness can be seen only below $1437.

The near term resistance is around $1565 and the indicative break above targets $1580/$1600.

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