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RJ Market Watch

Gold Recovers Above $1310, Remains in the Negative Territory



The XAU/USD pair slumped to a 6-day low of $1308.50 earlier in the day before staging a modest recovery in the NA session. As of writing, the pair was trading at $1314, losing 0.25% on a daily basis. The broad-based USD strength weighed on the pair during the first half of the day. Amid a lack of significant fundamental drivers during the first half of the day, investors stayed focused on last Friday’s strong employment and manufacturing PMI data from the U.S. and helped the greenback outperform its major rivals. Additionally, a more-than-1% increase seen in the 10-year T-bond yield today supported the US Dollar Index upsurge, which lost some strength after touching a session high of 95.92.

With the latest data from the U.S. revealing that new orders for manufactured goods in November declined by 0.6% to miss the market expectation for an increase of 0.25%, the DXY eased slightly and was last up 0.22% on the day at 95.83.

Meanwhile, major equity indexes in the U.S. started the day flat and are now trading mixed with the Nasdaq Composite adding 0.7% and the Dow Jones Industrial Average losing 0.25%.

Technical outlook

With today’s drop, the CCI indicator on the daily chart extended its decline below the 100 mark, suggesting that the bullish pressure is starting to fade away. The initial support for the pair aligns at $1308.50 (daily low) ahead of $1300 (psychological level) and $1296 (20-DMA). On the upside, resistances are located at $1317 (daily high), $1326 (Jan. 31 high/May 11, 2018, high) and $1325 (Apr. 23, 2018, high).

Courtesy: fxstreet.com

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