Ichimoku Analysis (4-hour chart)
Tenken-Sen- $1862.67
Kijun-Sen- $1853.38
Gold pared some of its gains after hitting seven month high due to profit booking. As the dollar sell-off continues, the yellow metal was among the best performers in the past two days. The US dollar index showed a minor pullback from seven month low of 102.94 ahead of Fed Powell's speech. Gold hits an intraday low of $1867 and is currently trading around $1872.13.
US dollar index- Bearish. Minor support around 102.80/102. The near-term resistance is at 103.40/104.10.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in Feb rose to 78.7% from 67.7% a week ago.
The US 10-year yield declined below the 3.60% level once again. Any break and close below 3.32% confirm the further bearish trend. The yield spread between 10 and 2-year narrowed to -67.9 basis points from -77 bpbs.
Factors to watch for gold price action-
Global stock market- bullish (bearish for gold)
US dollar index – Bearish (positive for gold)
US10-year bond yield- Bullish (Positive Negative for gold)
Technical:
The near–term support is around $1865, a break below targets of $1850/$1840/$1825.The yellow metal faces minor resistance around $1880, and a breach above will take it to the next level of $1909/$1920.
It is good to buy on dips around $1848 with SL around $1825 for TP of $1919.
