Gold has recovered sharply more than $10 after dovish Fed chair comment and slightly weak dollar.It is currently trading around $1224.85.
The major three factors that drive gold prices
US dollar Index: Weak. DXY has lost more than 0.8% from high of 97.54.The index’s previous high is around 97.69 and any further bullishness only above that level.It is currently trading around 96.76.The near term support is around 96.70 (20-day MA) and any break below targets 96. (Positive for gold).
USD/JPY: Slightly weak. The pair has once again declined after showing a minor jump above 114. It is currently trading around 113.46. The near term resistance is around 113.70 and any break above targets 114/114.55. Slightly negative for gold.
US 10 year yield : US 10 year yield is trading slightly lower after Powell’s speech It faces strong support around 3.02.Any further weakness only if it breaks convincingly below 3.02%. It is currently trading around 3.035%. Positive for Gold.
US 2 year yield: It has taken support near 89-day EMA and shown a marginal higher. The spread between US 10 year and 2 year has decreased from 30bpbs to 22 bpbs.
Gold technical
Major support $1183
Major resistance - $1240
The yellow metal has regained more than $10 from low of $1211.On the higher side, major resistance is around $1230 and any convincing break above $1230 will take the commodity till $1236. It should break above $1243 (Oct 26th 2018 high) for bullish continuation.
The near term support is around $1217 (55 day EMA) and any violation below will drag the commodity down till $1209/$1200.
It is good to buy on dips around $1222-23 with SL around $1217 for the TP of $1243.


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