Overall trend - bearish
Gold is consolidating in narrow range between $1211 and $1234.95 for past three trading session. It is currently trading around $1224.
The major three factors to be watched for gold price movement are
- US Dollar index – strong (positive for gold)- DXY has recovered more than 70 pips from yesterday’s low of $94.08.The index has formed temporary top around 95.65. It is currently trading around 94.80.
- USD/JPY- sideways (neutral for gold)- It is showing a minor correction after hitting high of 111.25 (lower high). It is trading slightly below 20- day MA and is at 111.
- US 10 –year yield – 2.97% (jumped more than 6% from this month low of 2.80% (slightly negative for gold).
- US 2 year yield 2.68% (0.45% lower). The spread between 2 year and 10 year yield (2.97%-2.68%) is 29 basis point slightly increased from 23 basis point.
The pair is facing strong support at $1217 and any break below will take the yellow metal till $1209/ $1200 (61.8% fib)/$1160.
The near term resistance is around $1240 (20-day MA) and any convincing break above will take the yellow metal till $1250/$1260.
It is good to sell on rallies around $1228-30 with SL around $1237 for the TP of $1201/$11
