- US Dollar Index stays quiet above 97.
- Major US equity indexes drop around 1%.
- Risk aversion boosts the demand for the precious metal.
After edging down to $1210 area earlier in the session, the XAU/USD pair gained traction and rose to a fresh session high of $1215.70 helped by the risk-off mood. As of writing, the pair was trading at $1214.50, adding 0.3% on a daily basis.
Earlier today, the greenback failed to take advantage of the upbeat retail sales report, which showed an increase of 0.8% on a monthly basis in October above the market expectation of 0.5%. Other data from the U.S. revealed that the business activity in the manufacturing activity in the Philadelphia area expanded at a slower pace than expected. Ahead of Fed Chairman Powell’s speech later in the session, the US Dollar Index is up 0.12% on the day at 97.10.
Commenting on the retail sales data, “American consumers have affirmed they are still in charge. The rebound in retail sales in October leading into the holiday shopping season is good news for the economy, the Fed and the dollar,” FXStreet senior analyst Joseph Trevisani said.
Meanwhile, major equity indexes in the United States started the day in the negative territory and extended their fall dragged by a more than 2% loss seen in the consumer discretionary sector. At the moment, the Dow Jones Industrial Average, which lost more than 1%, was down 0.75% while the S&P 500 was losing 0.7% to reflect the weak risk appetite.
Technical levels to consider
The immediate resistance for the pair aligns at $1216 (daily high/Nov. 14 high) ahead of $1223 (Nov. 9 high) and $1227 (Nov. 8 high). On the downside, supports are located at $1206 (daily low), $1200 (psychological level) and $1196 (Nov. 13 low).
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