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FxWirePro: Gold recovers more than $20 on Italian political uncertainty, good to buy on dips

Major resistance- $1217

The major three factors that drive gold prices

 US dollar Index: Slightly bearish. DXY has formed a double top around 95.75 and started to decline from that level.The index should break above 95.75 for further bullishness and any break above targets 95.75/ 96.25 (negative for gold).

 USD/JPY: Trend extremely Bullish. The pair has broken major resistance 114 and jumped till 114.06 yesterday.It hits 11- month high and is currently trading around 113.78.Minor support is around 113.02 (10- day MA) and any break below targets 112.50/112. Short term trend is slightly bullish as long as support 112 holds . Any daily close below 112 confirms minor bearishness and a dip till 111/110.38 likely. Slightly positive for gold.

 

US 10 year yield : US 10 year yield has shown minor recovery of more than 2% from the low of 3.02% It is currently trading around 3.060%. Any break above 3.129% confirms further bullishness. Slightly negative for Gold.

 

US 2 year yield: It hits 10 year high at 2.825%.The spread between US 10 year and 2 year has increased from 22bpbs to 24bpbs.

 Gold technical

Major support $1183

Major resistance - $1217

 The yellow metal has more than $20 from the low of $1188 and it is currently trading around $1207. The trend is slightly bullish as long as resistance $1180 holds.

 On the higher side, any break above $1210 will take the commodity till $1217/$1224/$1230.

The near term support is around $1180 and any violation below will drag the commodity down till $1170/$11620.

 It is good to buy on dips around $1202-03 with SL around $1196 for the TP of $117/$1225.

 

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