Ichimoku Analysis (4-hour chart)
Tenken-Sen- $1915.98
Kijun-Sen- $1925.03
Gold recovered more than $25 from the 21-day EMA ahead of Fed monetary policy. Markets eye signal about future rate hikes for further direction. Any hawkish comments from the Fed chairman will push gold prices lower. It hits a low of $1900.82 and is currently trading around $1926.36.
US CB Consumer confidence declines to 107.1 in Jul, below the estimate of 109.10. Chicago PMI contracted to 44.1, the fifth consecutive month.
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 is trading flat ahead of policy. 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- 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 $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 stay away till Fed policy.
