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FxWirePro: Gold trades higher as global stock market flu rises demand of safe haven assets, good to buy on dips

Gold is trading steady above $1230 level despite strong USD. The huge sell-off in global stock market has increased demand for yellow metal.

The major three factors that drive gold prices

 US dollar Index: Bullish. DXY hits 2-1/2 month high at 96.53 and is currently trading around 96.28. The near term major resistance is around 97 and any break above targets 98/98.45 ( Slightly negative for gold).

 USD/JPY: weak . The pair has declined slightly below 112 and is currently trading around 112.04. Any further weakness cane be seen below 111.50. The near term resistance is around 112.91 (20- day MA) and any break above targets 113.48/114. Slightly positive for gold.

 

US 10 year yield : US 10 year yield is trading slightly weak and has lost more than 2.5% yesterday.It is currently trading around 3.17%. Slightly positive for Gold.

 

US 2 year yield: It is trading slightly lower after hitting fresh high at 2.925% .The spread between US 10 year and 2 year has increased from 22bpbs to 27bpbs.

 Gold technical

Major support $1183

Major resistance - $1240

 The yellow metal is trading steady after hitting high of $1239 on account of weak global stock market .On the higher side, any break above $1240 will take the commodity till $1265 .It should close above $1265 for bullish continuation.

The near term support is around $1218 (89- day EMA) and any violation below will drag the commodity down till $1211/$1204.

 It is good to buy on dips around $1227-28 with SL around $1218 for the TP of $1250/$1265.

 

 

 

 

 

 

 

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