- Wall Street rebounds on Wednesday.
- Improved market sentiment keeps gold’s upside capped.
- US Dollar Index stays in the negative territory following mixed data releases.
After spending the majority of the day in a tight range above the $1220 mark, the XAU/USD pair gained traction in the early NA session and rose to its highest level in two weeks at $1230. However, with Wall Street staging a recovery ahead of Thanksgiving holiday, the pair failed to extend its rally and was last seen trading at $1227, adding 0.45% on a daily basis.
Earlier today, the U.S. Census Bureau announced that new orders for manufactured durable good in October fell 4.4% to $248.5 billion. Moreover, the University of Michigan’s Consumer Confidence Index fell to 97.5 in October from 98.6 in October and fell short of the market expectation of 98.3. On a positive note, after declining for six straight months, existing home sales rose 1.4% in September. Following these data releases, the US Dollar Index failed to move into the positive territory and was last down 0.15% on the day at 96.68.
On the other hand, after suffering heavy losses on Monday and Tuesday, major equity indexes turned north on Wednesday on the back of an improved market sentiment, which makes it difficult for safe-havens like the precious metal to find demand. At the moment, the Dow Jones Industrial Average and the S&P 500 were up 0.75% and 1.05%, respectively.
Technical levels to consider
The pair could face the first support at $1215 (50-DMA) ahead of $1206 (Nov. 9 low) and $1200 (psychological level). On the upside, resistances are located at $1230 (daily high), $1236 /Nov. 7 high) and $1243 (Oct. 26 high).
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