Gold intermarket: close ties with WTI stuck around 10 hourly sma, capped here?

Ross J Burland FXStreet

Despite the rise in oil and subsequent rally on Wall Street, along with USD/JPY better bid gold had managed to stage a rally to $1,236 today the high.

However, the bears are playing catch up as the session gets going and gold has dropped back into line and has tested the 20 sma on the hourly sticks at $1,231.19.

US Dollar consolidates losses around 98.80

The DXY is the anchor at the moment, currently down -0.35% at the time of writing and trading below the 99.25 previous close at 98.90. The rally in yields was not sustained today, with the 10 years dropping back from the highs of 2.3486 back to 2.3362 currently, albeit still up +0.45% on the day.

Indeed, however, it seems that the correlation between oil and gold are the driving forces, with WTI leading the way. For gold to continue back on the bid, WTI bulls need to get back above the 10 sma on the hourly sticks at 49.11 targeting a break above 49.50. An offer in the DXY to back below 98.80 could be the trigger, especially should the 10 years drop below current support around 2.3345 and move back towards 2.3200.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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