Overall trend - bearish
Gold is consolidating in narrow range between $1204.52 and $1219.78 for past three three trading session. US dollar index hits 2 week high and declined slightly more than 50 pips on profit booking.The yellow metal hits low of $1204.54 on Friday and jumped till $1219.90. It is currently trading around $1214.50.
The major three factors to be watched for gold price movement are
- US Dollar index – slightly weak (positive for gold)- DXY has shown a decline of more than 50 pips from the high of 95.52 on account of profit booking.DXY has formed temporary top around 95.65 and any break above confirms bullish continuation. It is currently trading around 95.05.
- USD/JPY- slightly weak (positive for gold)- It is showing a minor correction after hitting high of 112.15. It is currently trading around 111.27.
- US 10 –year yield – 2.973% (gained more than 2% from low of 2.92%). It is slightly negative for gold.
- US 2 year yield 2.67% (0.0%). The spread between 2 year and 10 year yield (2.974%-2.674%) is 30 bass 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 $1215 (7-day MA) and any convincing break above will take the yellow metal till $1225 (20- day MA)/$1235 (daily Kijun-Sen).
It is good to sell on rallies around $1215-16 with SL around $1221 for the TP of $1201.
