- Commodity rally helps the precious metal gather strength on Tuesday.
- US Dollar Index stays in the negative territory.
After adding $10 on Monday, the troy ounce precious metal continued to gain value on Tuesday and touched its highest level since late October at $1242. As of writing, the XAU/USD pair was trading at $1241, gaining a little over $10, or 0.85%, on a daily basis.
The upbeat tone surrounding commodities led by an impressive rally seen in oil prices boosted the demand for gold for the second straight day today. Although crude oil prices seem to have started correcting its daily upsurge in the last hour, the broad-based USD weakness allows the pair to cling to its daily earnings.
The US Dollar Index, which failed to hold above the 97 mark on Monday, extended its slide on Tuesday as the greenback struggled to find demand with investors shifting their attention to major European currencies such as the euro and the British pound. At the moment, the DXY is down 0.35% on the day at 96.60. Later this week, the Fed’s Beige Book could be the next significant catalyst for the dollar.
Meanwhile, major equity indexes in the U.S. started the day slightly lower to provide additional support to the precious metal.
Technical levels to consider
The next critical resistance for the pair aligns at $1243 (200-DMA). With a decisive break above that level, the pair could aim for $1248 (Jul. 12 high) and $1260 (Jul. 10 high). On the downside, supports are located at $1230 (daily low), $1226 (Nov. 5 low) and $1220 (50-DMA).
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