- Wall Street starts the day on a positive note.
- US Dollar Index sticks to daily gains near mid-95s.
- Gold edges lower after failing to break above $1200.
After extending its recovery to a fresh 10-day high at $1201, the XAU/USD pair lost its traction on Thursday amid an improved market sentiment and a stronger greenback. At the moment, the pair is down 0.5% on the day at $1190.
The US Dollar Index, which moved below the 95 mark for a short period yesterday, began retracing its weekly losses on Thursday. Although the Markit PMI numbers fell short of market expectations, the index is sticking to its daily gains near the 95.50 mark. The Manufacturing PMI in the U.S. fell to its lowest level since November 2017 at 54.5 while the Services PMI dropped to a 4-month low at 55.2.
On a USD-positive note, Kansas Fed president Esther George repeated her support for two more rate hikes this year and stated that President Trump’s comments on the Fed’s monetary policy wouldn’t influence her decision. Furthermore, the weekly initial jobless claims fell to 210K to confirm the tightening labor market conditions, which was highlighted in the FOMC meeting minutes yesterday.
Despite Trump’s claim that stock markets would crash if he were impeached, Wall Street started the day higher to reflect the improved market sentiment that makes it difficult for safe-havens to find demand. As of writing, the Dow Jones Industrial Average was virtually unchanged on the day while the S&P 500 was within a touching distance of a new record high with a 0.15% daily gain.
Technical levels to consider
Supports for the pair could be seen at $1186 (daily low), $1173 (Aug. 15 low) and $1160 (Aug. 16 low). On the upside, with a daily close above $1200 (psychological level/20-DMA), the pair could extend its upside toward $1212 (Aug. 13 high) and $1223 (50-DMA).
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