Gold has shown a good jump despite strong US jobs data It has recovered more than $12 from Friday’s low of $1284.It is currently trading around $1296.24.
The major three factors that drive gold prices
US dollar Index: Bearish. DXY has once again declined after a minor jump till 97.47. The index has formed a double top around 97.47-97.52 and is currently trading around 97.25. 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: Strong . USD/JPY has lost nearly 50 pips from high of 111.82.It is trading slightly below 200- day MA.Positive for gold.
US 10 year yield : US 10 year yield has halted its 8% jump and lost nearly 2.5%. The yield has been trad ing weak for past two months and lost nearly 25% from high of 3.25%.It is currently trading around 2.48%. slightly positive for Gold.
US 2 year yield: It is trading around 2.32%. The spread between US 10 year and 2 year has declined to 16bpbs 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 buy on dips $1292-93with SL around $1286 for the TP of $1309.


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