Gold halts its weakness and jumped more than $15.The jump was mainly due to dovish Fed and broad based US dollar weakness. It is currently trading around $1294.96.
The major three factors that drive gold prices
US dollar Index: weak. DXY has broken double bottom 95.65 and declined till 95.12. Any break below 94.80-94.90 confirms further weakness and decline till 93.84 likely. On the higher side any break above 97.75 confirms bullish continuation.(slightly positive for gold).
USD/JPY: weak. USD/JPY has lost nearly 100 pips from the high of 109.08 level.Any break below 107.50 confirms further weakness.It is currently trading around 107.85. Slightly positive for gold
US 10 year yield : US 10 year yield is trading lower after dovish Fed The yield has lost more than 2.5%. The yield has declined sharply in past two months and lost nearly 22% from high of 3.25%.It is currently trading around 2.69%.Slightly positive for Gold.
US 2 year yield: It is trading around 2.53% and lost nearly more than 3.5%. The spread between US 10 year and 2 year has declined to 16 bpbs from 30 basis point. The spread between 5 year and 2- year yield has inverted (US 5 year yield trading below US2 year yield).
Gold technical
Major support $1183
On the higher side, yellow metal is facing strong psychological resistance around $1300 and break above will take the gold to next level till $1320.
The near term support is around $1270 (20- day MA) and any violation below will drag the commodity down till $1266/$1252/$1242 /$1234.
It is good to buy on dips around $1284-85 with SL around $1270 for the TP of $1320.


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