Ichimoku Analysis (4-hour chart)
Tenken-Sen- $1925.65
Kijun-Sen- $1932.98
Gold is trading lower for the third consecutive day ahead of Fed policy. Any hawkish rate hike by Fed will push gold prices lower. The yellow metal rallied more than 15% in three months as US inflation came below estimate. It hits an intraday low of $1920.51 and is currently trading around $1920.72.
Markets eye US CB Consumer confidence and Chicago PMI for further direction.
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 dropped to rose to 97.6 from 98.60% a week ago.
The US 10-year yield surged more than 7% from minor bottom. Any break and close below 3.26% confirm minor bearishness. The yield spread between 10 and 2-year narrowed to -69.80 basis points from -75 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 buy on dips around $1890 with SL around $1880 for TP of $1935/$1950.
