Ichimoku Analysis (4 Hour chart)
Tenken-Sen- $1729.78
Kijun-Sen- $1711.06
Gold surged sharply after weak US CPI data. Consumer prices rose 7.7% in Oct, down from the previous month's 8.2%, below the estimate of 8%. The US dollar index pared most of its gains made the previous month as the chance of aggressive rate hikes diminishes. A dip to 105.70 is possible.
According to the CME Fed watch tool, the probability of a 75 bpbs rate hike in Dec dropped to 19.4% from 48% a week ago.
The US 10-year yield lost more than 10% after hitting a high of 4.244%. The US 10 and 2-year spread narrowed to -51.90 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 $1740, a break below targets of $1720/$1700/$1680. The yellow metal faces minor resistance around $1760, the breach above will take it to the next level of $1800.Minor bullish continuation only if it breaks $1760.
It is good to buy on dips around $1730 with SL around $1718 for TP of $1800.
