FxWirePro- Gold Weekly Outlook

Ichimoku Analysis (Weekly chart)

Tenken-Sen- $1827.03

Kijun-Sen- $1768.45

Gold was one of the best performers and surged more than $50 on the weak US dollar. It pared most of its gains made the previous week on soft US CPI.  US inflation came in line with expectations. Headline CPI dropped to 6.5% YoY in Dec from 7.1% in Nov. Core CPI also declined from 6% to 5.7% y/y. Gold hits a high of $1929.05 and is currently trading around $1926.79.

 The number of people who have filed for unemployment benefits fell by 1000 to 205000 last week, below the forecast of 216000. The University of Michigan consumer sentiment rose to 64.6 in Jan, the highest level since May.

 US dollar index- Bearish. Minor support around 101.50/100. The near-term resistance is 102.65/103.40.

According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in Feb rose to 93.2% from 75.70% a week ago.

 The US 10-year yield pared some of its loss after hitting a low of 3.417%. Any break and close above 3.40% confirms minor bearishness. The yield spread between 10 and 2-year widened to -73 basis points from -46.9 bpbs.

Factors to watch for gold price action-

 Global stock market- bullish (bearish for gold)

US dollar index – Bearish (positive for gold)

US10-year bond yield- Bearish (Positive for gold)

Technical:

 The near–term support is around $1915, a break below targets of $1890/$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 $1890-91 with SL around $1860 for TP of $1948/$1965.