- US Dollar Index stays calm below 96.
- European equity indices suffer modest losses on Monday.
The XAU/USD pair closed the previous week above the critical $1300 mark and extended its gains earlier in the day on Monday to touch its highest level since early June near $1305. However, with trading action remaining subdued amid a lack of significant catalysts, the pair started to retrace its advance and was last seen trading at $1300, losing 0.25% on a daily basis.
The greenback, which came under heavy selling pressure last week following reports of the Fed planning to end the balance sheet reduction scheme earlier than expected, stays relatively quiet on Monday with the US Dollar Index trading sideways a little below the 96 mark. Later in the session, the Chicago Fed will publish its National Activity Index and the Dallas Fed will release the findings of its regional manufacturing survey.
Meanwhile, major European equity indexes post modest losses on Monday while investors wait for the ECB President Draghi to testify before the European Parliament in Brussels. The souring market mood is also likely to keep Wall Street at the opening bell. The S&P 500 Futures is now down 0.5% on the day. If stock markets in the U.S. spend the session under pressure, the precious metal could find demand as a safe-haven and try to push higher.
Technical levels to consider
As long as the pair closes the day above the $1300 mark, buyers are likely to stay in control of the pair’s price action. $1305 (daily high) aligns as the initial resistance ahead of $1310 (Jun. 13, 2018, high) and $1315 (May 15, 2018, high). On the downside, supports are located at $1300 (psychological level), $1288 (Jan. 17 low) and $1280 (Jan. 25 low).
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