- Gold is having a tough time determining its next short-term direction.
- Trade-war concerns weigh on global equity indices.
Following last Friday’s heavy sell-off, the XAU/USD pair is fluctuating in a relatively tight range on Monday as the precious metal fails to take advantage of the risk-off mood. As of writing, the pair was virtually unchanged on the day at $1280.
Political jitters in Germany and the concerns over a global trade conflict between the United States and the rest of the world force investors to look for safer assets. However, a recovery seems difficult as buyers remain on the sidelines after the troy ounce of the precious metal lost more than $20 on Friday.
Wall Street started the day on a weak note and major equity indices continue to push lower. As of writing, the Dow Jones Industrial Average was down nearly 1% on the day while the S&P 500 was losing 0.6%.
On the other hand, the US Dollar Index is consolidating its daily losses near 94.50 amid a lack of fresh fundamental developments that could impact the market action. Later in the session, Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, will be delivering a speech.
Technical outlook
The CCI indicator on the daily chart has recently turned north below the -100 mark, suggesting that the pair is correcting its oversold reading. Similarly, the RSI indicator on the same chart stays above 30. On the downside, the initial support aligns at $1273 (Dec. 26 low) ahead of $1265 (Dec. 22 low) and $1260 (Dec. 5 low). On the upside, resistances could be seen at $1282 (daily high), $1300 (psychological level) and $1308 (200-DMA).
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