FxWirePro: Gold Daily Outlook

Overall trend - bearish

Gold has recovered slightly after US non farm payroll data. US economy has added only 157000 jobs for the month of Jul compared to forecast of 193000 and unemployment rate declines below 4% and wage growth are steady at 2.7%.. But upward revision 248000 shows that labor market is growing at stronger pace. US dollar index hits 2 week high and is consolidating after hitting high of 95.37. The yellow metal hits low of $1204.54 on Friday and jumped till $1219.90. It is currently trading around $1213.54. 

The major three factors to be watched for gold price movement are

1. US Dollar index – strong (negative for gold)- DXY has shown a good jump of more than 100 pips from the low of 94.16. DXY has formed temporary top around 95.65 and any break above confirms bullish continuation. It is currently trading around 95.28.
    
2. USD/JPY- slightly weak (positive for gold)- It is showing a minor correction after hitting high of 112.15. It is currently trading around 111.32.
    
3. US 10 –year yield – 2.95% (lost more than 2% after hitting high of 3.016). It is slightly positive for gold.
4. US 2 year yield 2.65% (0.15% lower). The spread between 2 year and 10 year yield (2.95%-2.65%) is 30 basis point slightly up from low of 22 basis point.

The pair is facing strong support at $1207 and any break below will take the yellow metal till  $1200 (61.8% fib)/$1190/$1160.

The near term resistance is around $1220 (7-day MA) and any convincing break above will take the yellow metal till $1230 (20- day MA)/$1236.

It is good to sell on rallies around $1215-16 with SL around $1221 for the TP of $1201.