Ichimoku Analysis (4-Hour chart)
Tenken-Sen- $1654.38
Kijun-Sen- $1661.36
Gold gained nearly $20 from a minor bottom of $1640 on the US dollar weakness. DXY pared some of its gains due to profit booking. Any close below 112 confirms further bearishness. The escalation of tension between Russia and Ukraine supports the yellow metal at lower levels.
The US 10-year yield remained above 4% in hopes of aggressive rate hikes. The US 10 and 2-year spread narrowed to -44 basis points from -57 bpbs.
According to the CME Fed watch tool, the probability of a 75 bpbs rate hike in Nov rose to 96.2% from 81.3% a week ago.
Factors to watch for gold price action-
Global stock market- bearish (positive for gold)
US dollar index – Bullish (negative for gold)
US10-year bond yield- Bullish (negative for gold)
Technical:
The near–term support is around $1660, a close below targets of $1650/$1618.The yellow metal faces minor resistance around $1680, the breach above will take it to the next level of $1700/$1720/$1740/1760/$1800. Minor bullish continuation only if it breaks $1740.
It is good to sell on rallies around $1678-80 with SL around $1700 for TP of $1615.
