Gold prices is continuing its weakness after showing a minor recovery of $13 in this week from the low of $1261.14. US dollar index pared most of its gains in the past two trading session. DXY hits high of 95.50 and decl…
Gold prices is continuing its weakness after showing a minor recovery of $13 in this week from the low of $1261.14. US dollar index pared most of its gains in the past two trading session. DXY hits high of 95.50 and declined more than 130 pips on account of profit booking. The major reason for huge decline in gold in the previous week is due to strong US dollar index. The yellow metal declined more than $50 in past two weeks. The slight policy divergence in Fed and ECB is dragging Euro lower. US 2 –year bond yield is trading slightly steady after a minor decline till 2.49% and has jumped 0.50% for the day. It is currently trading around 2.55% and 10 year yield is trading `slightly higher at 2.89% 0.40% higher. The trade tension between US and other major economies has been escalated and USD/JPY is trading weak and declined more than 150 pips. It is currently trading around 109.60. The yellow metal is currently trading around $1264.
The major three factors to be watched for gold price movement are
US Dollar index – Weak (Strong for gold)
USDJPY- negative (positive for gold)
US 10 –year yield – 2.89% (-0.44% for the day negative for gold)
The yellow metals near term resistance at $1275 (7- day MA) and any convincing close above will take the yellow metal till $1280/$1286 (10- day MA)/1290.The minor resistance is around $1270.
On the lower side, near term support is around $1260 and any break below will drag the yellow metal down till $1250/$1236.
It is good to sell on rallies around $1265-67 with SL around $1276 for the TP of $1250/$1236.
