Gold intermarket: bulls take advantage of the relief in DXY consolidation

Gold caught a profit-taking bid last week vrs the Trump fuelled sell-off from $1,337.17c and had rallied to $1,197 with a 0.2% decline in DXY on Friday.

Today, gold is consolidating the minor recovery and oscillates at 1190 at time of writing with a mix greenback. The data is light at the start of the week and we await nonfarm payrolls and US GDP as the main event for both the dollar and yellow metal before next month's FOMC meeting where the market continues to price in the likelihood of the Federal Reserve hiking rates for the first time in a year driving gold lower, US yields and the US dollar higher.

The selling pressure this month has been significant with the price slicing through the 200 dma at 1282 today, busting October's lows that led to a push below the psychological 1200 mark last week as the DXY rallied to fresh 14 year highs on the 102 handle and into overbought territory with the price now finding strong support in the 100.70/60 zone and trading back to 101.50 in recent trade. An extension in the upside of the DXY exposes further levels below 1$,200 in gold and opens $1,168.93 lows once again ahead of 2016 lows in Jan of $1,115.43.