- Technical selling pressure pulls the XAU/USD pair lower.
- Falling T-bond yields fail to help gold limit its losses.
- US Dollar Index looks to make its highest weekly closing of the year.
After piercing below its month-old trading range’s lower band near $1290, the XAU/USD pair continued to edge lower and touched its worst level since late December at $1277. As of writing, the pair was trading at $1278, losing nearly $25, or 1.9%, on the day.
The risk appetite seems to weaken in the NA session with major equity indexes in the United States recording heavy losses and the yield of the 10-year US T-bond losing around 1%. However, gold as a safe-haven is struggling to take advantage of the negative sentiment with sell orders getting activated following the fall below the critical level.
Earlier today, the data from the United States showed that the industrial production shrunk by 0.1% in May while the preliminary reading of the UoM Consumer Sentiment Index improved to 99.3 from 98. The US Dollar Index is moving sideways near the 94.80 mark and is looking to close the week at its highest level since December.
Meanwhile, the XAU/EUR pair is also losing around $25, 2.2%, on the day, confirming the selling pressure witnessed on the precious metal.
Technical levels to consider
The CCI indicator on the daily chart has recently fallen below the -100 mark, suggesting that the bearish momentum continues to gather strength. On the downside, the pair could encounter the first support at $1273 (Dec. 26 low), $1265 (Dec. 22 low) and $1260 (Dec. 5 low). On the uıpside, resistances align at $1286 (the lower arm of the daily 14-period Bollinger band), $1300 (psychological level) and $1308 (200-DMA).
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