Ichimoku Analysis (4-hour chart)
Tenken-Sen- $1970.19
Kijun-Sen- $1970.19
Gold prices surged sharply due to strong crude oil prices and weak US economic data. The Organization of the Petroleum Exporting Countries has announced a surprise production cut of 1.16 million barrels per day. It hits a high of $1990.54 and is currently trading around $1981.20.
US ISM manufacturing slumped to a three-year low at 46.3 in Mar, compared to a forecast of 47.50.
US dollar index-Bearish. Minor support around 101.90/101. The near-term resistance is 102.80/103.40/104.20.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in May increased to 54.8% from 40.2% a week ago.
The US 10-year yield lost more than 5% from a minor top around 3.61%. The US 10 and 2-year spread narrowed to -56% from -108%.
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 (negative for gold)
Technical:
The near–term support is around $1955, a break below targets of $1944/$1935/$1921/$1890.The yellow metal faces minor resistance around $1966, and a breach above will take it to the next level of $1980/$2010/$2020.
It is good to buy on dips around $1960 with SL around $1943 for TP of $2000.
