- DXY drops below mid-93 in the early NA session.
- Wall Street opens slightly higher.
- The XAU/USD pair remains in the 10-day old range.
After easing to a daily low of $1294, the troy ounce of the precious metal retraced its losses and turned positive above the critical $1300 mark. As of writing, the pair was trading at $1300.50, adding $1.5, or 0.12%, on the day.
The pair’s price action seems to be dominated by the USD valuations on Monday and continues to stay technical. The positive tone surrounding the major equity indexes during the first half of the day and the US Dollar Index’s modest recovery to the 93.70 area weighed on the pair. However, with no significant macroeconomic data releases, gold is having a hard time making a decisive move in either direction.
With the US Dollar Index erasing its daily gains at the start of the NA session, the pair was able to reverse its course. At the moment, the DXY is down 0.1% on the day at 93.45.
Later in the session, headlines from the Donald Trump – Kim Jong Un summit could impact the risk sentiment and cause gold prices to react. If we see a higher appetite for risk, the pair is likely to fail to stay above $1300. On the other hand, if the geopolitical tensions escalate, we could witness a sharp upsurge.
Technical outlook
Even if the pair the pair gathers traction, it would need to make a daily close above $1308, where the critical 200-DMA is located, to be able to extend its gains. $1315 (May 15 high) and $1322 (May 14 high) could act as next resistance levels. On the downside, $1300 (psychological level) is the immediate support ahead of $1294 (daily low) and $1289 (Jun. 1 low).
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