Ichimoku Analysis (4 Hour chart)
Tenken-Sen- $1700.61
Kijun-Sen- $1675.49
Gold halted its three days rally ahead of US CPI data. US stock markets lost their shine after Republicans gains modestly in the Midterm election. Any weakness in US inflation will push the yellow metal further higher. The US dollar index pared some of its gains after hitting a high of 110.64. Any close below 109.50 confirms further bearishness.
According to the CME Fed watch tool, the probability of a 50 bpbs rate hike in Dec rose to 54.4% from 51.5% a week ago.
The US 10-year yield pared some of its gains after hitting a high of 4.23%. The US 10 and 2-year spread narrowed to -52.50 basis points from -67 bpbs.
Factors to watch for gold price action-
Global stock market- Bullish (negative for gold)
US dollar index – Bearish (Positive for gold)
US10-year bond yield- Bearish (Positive for gold)
Technical:
The near–term support is around $1700, a break below targets of $1680/$1660/$1650. The yellow metal faces minor resistance around $1740, the breach above will take it to the next level of $1760/$1800.Minor bullish continuation only if it breaks $1740.
It is good to buy on dips around $1680-82 with SL around $1660 for TP of $1740/$1760.
