Gold faces strong resistance at 50 –day MA, good to buy on dips

• Gold has rallied almost $13 yesterday and hits fresh 1- week high on weak U.S dollar and geo political tensions. The yellow metal jumped almost $34 from the low of $1260 made on Friday
   
• Tensions have increased between U.S and North Korea after series of missile test and six nuclear weapon test in recent weeks.
   
• US Dollar index has shown a minor weakness after hitting a high of 94.27 on Friday. It is currently trading around 93.25. The pair is facing major support near 93-93.11 (38.2% fibo and 34- day EMA) and any break below confirms minor weakness. The near term resistance is at 94.45 (50% fibo) and any break above will take the index to next level till 95.
   
• U.S 10 year yield has shown a minor decline from the high of 2.40% as investors await news on the next Fed chairman.
   
• Technically gold is facing major resistance around $1298 (50- day MA) and any break above will take the yellow metal till $1302/$1309 (50% retracement of $1357 and $1260)
   
• Gold’s near term support is around $1262 (61.8% retracement of $1204 and $1357.90) and break below will drag the commodity down till $1250 (200- day MA).The yellow metal should close below $1250 for major trend reversal. The near term support is around $1276 (10- day MA).

It is good to buy on dips around $1282-$1284 with SL around $1275 for the TP of $1287/$1295.