Ichimoku Analysis (Weekly chart)
Tenken-Sen- $1675
Kijun-Sen- $1750.41
Gold surged declined sharply after US NFP. The US economy added 261000 jobs in Oct, above the estimate of 197K. But the jump in the unemployment rate has dragged the US dollar index down. It has lost more than 150 pips after the data. The weak US ISM manufacturing, services, and US NFP are expected to decrease the chance of further aggressive rate hikes. The yellow metal hits a high of $1682.13 and is currently trading around $1672.98.
Markets eye US mid-term elections and CPI data for further direction.
The US 2-year yield jumped to the highest level since Jul 2007. The US 10 and 2-year spread narrowed to -52 basis points from -67 bpbs.
According to the CME Fed watch tool, the probability of a 50 bpbs rate hike in Dec increased 61.5% from 48.2% a week ago.
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- Mixed (Neutral for gold)
Technical:
The near–term support is around $1660, a break below targets of $1650/$1640/$1630. The yellow metal faces minor resistance around $1685, the breach above will take it to the next level of $1700/$1740.Minor bullish continuation only if it breaks $1740.
It is good to buy on dips around $1650-51 with SL around $1630 for TP of $1700/$1740.
