FxWirePro: Gold declines on rise in global stock market, good to buy on dips

Gold declined nearly $10 from high of $1289 on account of rise in global stock market. US market continues to trade higher with Dow Jones and S&P500 hits fresh all time high.The yellow metal hit low of $1277 and is currently trading around $1282.81.

US dollar Index: Bearish. DXY continues to trade lower for 2nd consecutive day and declined more than 50 pips from high of 98.33. Minor trend is slightly weak and a decline till 97.31 is possible .Any break below 97.31 (20 day MA) confirms further weakness and a decline till 96.85 likely.It is currently trading around 97.97. (positive for gold).

USD/JPY: weak . USD/JPY has lost more than 100 pips from high of 112.39.l.The near term support is 111.50 (200- day MA) and any violation below will drag the pair to net level till 111.Positve for gold.

 US 10 year yield : US 10 year yield jumped more than 1.5% on better than US GDP .In short term yield has lost more than 4.5% in past 10 trading days. Overall it has been trading weak for past four months and lost nearly 25% from high of 3.25%.It is currently trading around 2.533%. Slightly positive for Gold.

 US 2 year yield: It is trading around 2.302%. The spread between US 10 year and 2 year has declined to 23bpbs from 30 basis point. The spread between 3 month and 10- year yield  inversion has reversed (US 10 year yield trading above US 3 month).

Gold technical

On the higher side, near term resistance is around $1292 (55- day EMA) and any convincing break above targets $1296/$1300. The yellow metal should break above $1300 for further bullishness.

The near term support is around $1280 and any break below will drag the commodity down till $1274/$1270. Any bearish continuation only below $1266.

 It is good to buy on dips around $1280-81 with SL around $1274 for the TP of $1300.