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Gold Nears the Near Term Major Resistance

The dollar index plunged 0.61% on Thursday 16th Feb, fell to a 1-week low of 100.38.

Despite the better-than-expected US housing market data (Jan) and the initial jobless claims (for the week ending Feb 11), the dollar index has seen the biggest intra-day fall since the beginning of Feb, indicating the end of the uptrend of the month.

The retreat of US treasury yields from the high after Yellen’s hawkish testimony, and the noticeable drop of the industrial production (Jan), are likely to be two of the drivers of the dollar fall. The US 10-year treasury yields fell from 2.49% to 2.44% and 2-year yields fell from 1.253% to 1.20%.

The dollar index has seen a moderate rebound earlier today, after testing the support line at 100.50.

Gold prices has turned bullish since the end of last year, as a result of the retreat of the dollar.

Gold spot has retraced on 9th Feb, after testing the resistance at 1245.00.

On the 4 hourly chart, the current trend remains bullish, helped by the recent retreat of the dollar, trading above the downside uptrend line support.

However, the price is nearing the resistance zone between 1240-1245, be aware that the selling pressure is heavier at this zone.

The resistance level is at 1240, followed by 1242.50 and 1245.
Thee support line is at 1236, followed by 1233 and 1230.



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