FxWirePro: Gold trades well above $1200 on weak dollar and global stock market selling, good to buy on dips

Gold recovered till $1216 almost $20 from low of $1196 on account slight weakness in USD and sell-off in equity market.

The major three factors that drive gold prices

 US dollar Index: weak for intraday. DXY has declined nearly 100 pips after forming a temporary to pat 97.69. It is currently trading around 96.86.The near term resistance is around 97.70 and any break above targets 98. ( neutral for gold).

USD/JPY: Weak . The pair is trading slightly weak for 3rd consecutive days. USDJPY has jumped more than 350 pips from low of 111.37 and hits 5-week high at 114.22. It is currently trading around 113.52. The near term resistance is around 114.25 and any break above targets 114.55/115. Slightly positive for gold.

 US 10 year yield : US 10 year yield has lost more than 4.5% from high of 3.25%.Any further bullishness only above 3.25%. It is currently trading around 3.14%. Slightly positive for Gold.

 US 2 year yield: It is trading lower after hitting hitting fresh multi-year high at 2.98% and lost more than 5%.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 shown a good bounce of $20 from the low . On the higher side, major resistance is around $1217 (55 day EMA) and any break above $1217 will take the commodity till $1227/$1236 .It should break above $1243 (Oct 26th 2018 high) for bullish continuation.

The near term support is around $1190 and any violation below will drag the commodity down till $1178/$1160..

 It is good to buy on dips around $1206-07 with SL around $1198 for the TP of $1227.