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FxWirePro: Gold trades flat despite heavy sell-off in global stock market, good to buy on dips

Gold is consolidating after hitting high of $1225.32 despite heavy selling US stock market.

The major three factors that drive gold prices

 US dollar Index: Strong for intraday. DXY has gained more than 80 pips from the low of 96.04. It is currently trading around 96.82.The near term resistance is around 97.08 and any break above targets 97.40/97.70. (slight negative for gold).

USD/JPY: Weak . The pair is trading slightly higher for 2nd consecutive days. USDJPY has taken support near 89 day EMA. It is currently trading around 112.88. The near term resistance is around 113.08 and any break above targets 113.50/114. Slightly negative for gold.

 US 10 year yield : US 10 year yield is trading marginally higher and jumped more than 1.5% after a 6.5% decline from the high of 3.25%.It faces strong support around 3.07 (89- day EMA) .Any further weakness only if it breaks convincingly below 3.07%. It is currently trading around 3.073. neutral for Gold.

 US 2 year yield: It has taken support near 89-day EMA and shown a marginal higher. The spread between US 10 year and 2 year has decreased from 30bpbs to 26bpbs.

Gold technical

Major support $1183

Major resistance - $1240

 The yellow metal has shown a minor selling after hitting high of $1228. On the higher side, major resistance is around $1226 (61.8% fib) and any convincing break above $1226 will take the commodity till $1230/$1236 .It should break above $1243 (Oct 26th 2018 high) for bullish continuation.

The near term support is around $1217 (55 day EMA) and any violation below will drag the commodity down till $1209/$1200.

 It is good to buy on dips around $1215 with SL around $1209 for the TP of $1230.

 

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