Ichimoku Analysis (4-Hour chart)
Tenken-Sen- $1911.32
Kijun-Sen- $1904.80
Gold has traded in a narrow range between $1896 and $1925.95 for the past two days despite weak US treasury yields. The US Producer price index declined 0.50% last month, below the estimate of 0.10%. The YoY PPI came at 6.2% vs. an estimate of 6.8%. US retail sales came at -1.1% last month, the biggest drop since Dec 2021. Gold hits an intraday high of $1911 and is currently trading around $1909.55.
US dollar index- Bearish. Minor support around 101.50/100. The near-term resistance is 103.50/104.50.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in Feb rose to 96.40% from 76.70% a week ago.
The US 10-year yield pared most of its gains after hitting a high of 3.585%. Any break and close below 3.26% confirm minor bearishness. The yield spread between 10 and 2-year widened to -72 basis points from -46.9 bpbs.
Factors to watch for gold price action-
Global stock market- bearish (bullish for gold)
US dollar index – Bearish (positive for gold)
US10-year bond yield- Bearish (Positive for gold)
Technical:
The near–term support is around $1890, a break below targets of $1865/$1825.The yellow metal faces minor resistance around $1935, and a breach above will take it to the next level of $1950/$1969.
It is good to sell on rallies around $1918-20 with SL around $1935 for TP of $1860/$1825.
