Gold vs. US dollar; Healthy pullback? vs. 50-DMA breakout

Currently, the Gold spot is trading at $1246.23, down -0.12% or (153)-pips on the day, having posted a daily high at $1249.26 and low at $1236.94. On the other hand, the US 10yr treasury yields have traded from 2.46% to 2.39%, up to a robust +2.70% on the day at 2.45% or +0.0645.

Gold has been riding to the upside multiple uncertainty waves due to political risk in the Eurozone and the passive-aggressive 'America 1st' scheme the new US administration sticks to its ongoing propaganda. Hence, market participants had no other choice as "money flies were treated the best" to run towards the shiny metal, in efforts to hedge their risk exposure but all that can change as the asset lacks any yield and odds to experience a really sooner rather than later hike could clock bad news for Gold bugs.

As analysts at UOB noted, "Dudley (voter) said the case for tightening is now ‘a lot more compelling’ and a rate hike is likely in ‘relatively near future’." Furthermore, as of writing, FedWatch, based on CME Group 30-Day Fed Fund futures prices, indicates a current probability at 68.6% to experience a rate hike in March; suddenly the impossible seems doable.

US Personal Income and Spending: Good on the surface, weak overall - Wells Fargo

Historical data available for traders and investors indicates during the last 9-weeks that Gold spot, the shiny metal, had the best trading day at +1.41% (Jan.5) or 1664-pips, and the worst at -1.11% (Jan.18) or (1331)-pips.

Technical levels to watch

In terms of technical levels, upside barriers are aligned at $1263 (200-DMA), then at 1290 (high Nov.10) and above that at $1330 (high Nov.9). While supports are aligned at $1213 (100-DMA), later at $1190 (50-DMA) and below that at $1140 (low Jan.3).

On the other hand, Stochastic Oscillator (5,3,3) seems to continue heading south. Therefore, there is evidence to expect more Gold losses in the near term.

The greenback – gauged by the US Dollar Index seemed muted 'at 50-DMA gates' which contributed to a sell-off across the board (represented 7th attempt during the last 12 trading sessions). However, the bullish tone seems back on the table as the asset broker the 50-DMA to the upside. If prices continue the current trajectory, 102.48 (high Jan.9) could be the next logical target for dollar bulls.

In term of technical levels, upside barriers are aligned at 101.40 (high Feb.23), then at 102.10 (high Jan.16) and above that at 102.40 (high Jan.9). Meanwhile, supports are aligned at 100.20 (100-DMA), later at 99.60 (low Feb.6) and finally below that at 98.54 (low No.11). On the other hand, yesterday's daily candlestick confirmed the expected trap to squeeze short-sellers; all doors are now opened to ride the next leg up towards 102.00 and higher.

The real news is that the Fed trumped Trump