Gold Weekly Outlook 1 February
Gold is trading in a narrow range between $1875 and $1831.48 for the past two weeks. The huge roller coaster ride in US markets on volatile retail trading due to GameStops share has increased demand for safe-haven assets. The US volatility index rose more than 50% in the previous week due to. DXY is trading steadily above 90 levels; any jump above 91 confirms a bearish continuation. The slight recovery in the US 10-year yield is putting pressure on the yellow metal at higher levels.
US GDP shows that the 4th quarter economic recovery is at a snails pace compared to the previous quarter (33%). The Fed has kept its rates unchanged and said that economic growth will depend on the further spread of the virus and progress of vaccine. The number of people who have filed for unemployment benefits declined to 847000 in the week ended Jan 23rd vs a forecast of 860K
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It is facing strong support at $1840, violation below targets $1830/$1820/$1800.On the higher side, near term resistance is around $1879 (21-W MA), any indicative break above that level will take till $1885/$1900.
It is good to buy on dips around $1848-50 with SL around $1840 for the TP of $1900.