FxWirePro: Gold trades in a narrow range, markets eye ECB policy meeting

Major support- $1412-14 (trend line support and 21-day MA)

Gold is consolidating in a narrow range between $1414 and $1429 for the past three trading days. Markets eye ECB policy meeting. The central bank is expected to cut rates by 10 basis points this meeting on declining European manufacturing data. The Eurozone and Germany PMI came at 46.4 and 50 compared to the previous month 47.6, 51.9 respectively. The chance of rate cut has increased to 48.1, according to Reuters. US dollar index is to trade further higher if ECB is more dovish and which will be slightly negative for the yellow metal.

US 10 year yield has formed a temporary top around 2.15% and shown a dip till 2.02%. Short term trend is still weak as long as resistance 2.15-2.16% holds.

On the flip side, near term support is around $1412-14 and any violation below will drag the yellow metal to the next level till $1400/$1380. Major weakness only below $1380.

The near term minor resistance is around $1430 and any break above will take the yellow metal to the next level till $1450/$1465/$1500.

It is good to buy on dips around $1412 with SL around $1400 for the TP of $1450.