Gold hits 6-year high on Middle East tension escalation, good to buy on dips

Ichimoku Analysis (Daily chart)

Tenken-Sen- $1514.58

Kijun-Sen- $1502.93

Gold continues to trade higher and jumped more than $50 US-Iran geopolitical tension. The escalation of tension in the Middle East after the US killed a top Iranian Military general. President Trump threatened to hit 52 Iranian sites if Iran retaliates.

US 10- year bond yield has lost more than 9% after hitting a high of 1.95%. The spread between US 10 and 2-year has slightly narrowed to 25 bps from 35 bps.

The pair hits 6-month high at $1588 and any break above targets $1600/$1625. On the flip side, nearby significant support is around $1524 (5- day MA) and any violation underneath will drag the gold down till $1507/$1470.

It is good to buy on dips around $1550-55 with SL $1540 for the TP of $1600.