Gold intermarket: where now for Gold, it's hit that key $1,260 target already?

As per the article yesterday, (Gold intermarket: bulls coming to the table in a change of market climate) Gold has now reached the key resistance level we talked about yesterday in a change of the "market climate".

The key resistance level was 1,260 and that's been hit. What was mentioned yesterday was that USD/JPY and the euro were driving forces behind the decline in the DXY due partly to yields differentials narrowing. The Trump news since that article has propelled the upside in gold due to risk aversion, a further drop in yields and a narrowing in the spread between USD/JPY.

All the latest on Trump:

• US Dollar tumbles further on Trump jitters
• US: Trump’s travails starting to weigh on the dollar – ING
• US: Trump headlines stealing the show – Deutsche Bank
• Rep. Adam Schiff: Impeachment cannot be perceived as an effort to nullify the election by other means
• US Rep. Al Green: The President Must Be Impeached
• US House Speaker Ryan: Need the facts on Comey & Russia reporting - LiveSquawk
• US Rep. Al Green: Today, I will call for the impeachment of the President

In respect of the yields, the US 10 year benchmark has dropped a massive 4.50% today ranging between 2.2173%-2.3046% vs a close of 2.3257%. The JGB 10's were closing higher 0.005% within a range of 0.040-0.052% while USD/JPY was breaking down the doors on the 112 handle. This all was fuelling a test of the 4hr 200 EMA at 1245 in spot Gold as mentioned in the previous article as a critical resistance. Once this gave way there was no turning back, and indeed Gold spiked hard to current levels with progressive demand on the hourly sticks. 

Where now for Gold?

From here, Wall Street's close will take over and a level to watch for in the Dow is the is the 200 smoothed sma on the 4hr sticks located at 2,362.1. Should that give way today, Tokyo could be a blood bath, fuelling further bids in the Yen, especially on positive GDP results in today's Q1 data for Japan after this week's hawkish remarks from Kuroda. The BoJ governor said he was "quite sure" the central bank could smoothly exit from its massive monetary stimulus when the appropriate time to do so came which has already boosted the yen this week. The next upside level is $1,270 and $1,277 as previous key resistance.