FxWirePro: Gold trades below $1260, dip till $1240 likely
Gold prices is continuing its weakness for second consective week. The yellow metal jumped slightly till $1262 and started to decline from that level. US dollar index has taken support near 20 day MA and started to recov…
Gold prices is continuing its weakness for second consective week. The yellow metal jumped slightly till $1262 and started to decline from that level. US dollar index has taken support near 20 day MA and started to recover from that level. DXY hits low of 94.17 and jumped more thne 50 pips from the low. The major reason for huge decline in gold in the previous week is due to strong US dollar index. The yellow metal declined more than $50 in past two weeks. The slight policy divergence in Fed and ECB is dragging Euro lower. US 2 –year bond yield is trading slightly lower after a minor jump till 2.58% and has declined 0.25% for the day. It is currently trading around 2.54% and 10 year yield is trading `slightly lower at 2.87% 0.32% lower. USDJPY shown a minor jump of 80 pips from the low of 109.36. It is currently trading around 109.90. The yellow metal is currently trading around $1255.
The major three factors to be watched for gold price movement are
US Dollar index – Weak (Strong for gold)
USDJPY- Weak (negative for gold)
US 10 –year yield – 2.87% (-0.32% for the day positive for gold)
The yellow metals near term resistance at $1275 (7- day MA) and any convincing close above will take the yellow metal till $1280/$1286 (10- day MA)/1290.The minor resistance is around $1256.
On the lower side, near term support is around $1260 and any break below will drag the yellow metal down till $1250/$1236.
It is good to sell on rallies around $1265-67 with SL around $1276 for the TP of $1250/$1236.
