Gold is trading slightly higher and jumped nearly $10 from yesterday’s low of $1300 after dovish Fed minutes.
The major three factors that drive gold prices
US dollar Index: Bearish. DXY has once again taken support near 20 day MA and shown a minor jump. The index has formed a double bottom around 96.85 and is currently trading around 96.96. The near term support is around 96.79 and any close below targets 96.36/95.75.(positive for gold).
USD/JPY: Strong . USD/JPY has lost nearly 70 pips from high of 111.82. The near term support is around 300- day EMA around 110.98 and break below confirms further weakness.Positive for gold.
US 10 year yield : US 10 year yield is under pressure and lost more than 2% after weak US CPI ,dovish Fed minutes.The near term resistance is around 2.557% and any break above targets 2.609%/2.689%. The yield has been trading weak for past two months and lost nearly 25% from high of 3.25%.It is currently trading around 2.524%. Positive for Gold.
US 2 year yield: It is trading around 2.338%. The spread between US 10 year and 2 year has declined to 14bpbs 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 $1312 and any convincing break above targets $1316/$1324. The yellow metal should break above $1324 for further bullishness.
The near term support is around $1280 and any convincing below will drag the commodity down till $1269/$1260.
It is good to buy on dips $1300 with SL around $1290 for the TP of $1324.


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