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FxWirePro: Gold trades lower on strong dollar on rising US bond yield, good to sell on rallies

Gold is trading slightly weak and lost more than $25 from high of $1243.It is trading slightly below 89 day EMA on account of strong US dollar and rising 10-year US bond yield.

The major three factors that drive gold prices

 US dollar Index: Bullish. DXY is trading higher and broken major resistance at 97. The index jumped till 97.06 and is currently trading around 97.04. Any close above 97 confirms major trend reversal and jump till 98/98.45 likely ( Slightly negative for gold).

 USD/JPY: weak . The pair has recovered more than 150pips from low of 111.37 and is currently trading around 113.27. The near term resistance is around 113.47 (61.8% fib) and any break above targets 114/114.55. Slightly negative for gold.

 

US 10 year yield : US 10 year yield is trading higher and jumped more than 3% from low of 3.05%.It is currently trading around 3.14%. Slightly negative for Gold.

 

US 2 year yield: It is trading slightly higher after hitting low of 2.782%.The spread between US 10 year and 2 year has reduced from 33bpbs to 28bpbs.

 Gold technical

Major support $1183

Major resistance - $1240

 The yellow metal has declined almost $25 after hitting high of $1243 on account of strong USD .On the higher side, major resistance is around $1220 and any break above $1220 will take the commodity till $1229/1236 .It should close above $1243 for bullish continuation.

The near term support is around $1215 (55- day EMA) and any violation below will drag the commodity down till $1211/$1204.

 It is good to sell on rallies around $1220-22 with SL around $1228 for the TP of $1200.

 

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