Gold loses momentum ahead of $1290, retreats toward $1280 area

The troy ounce of the precious metal took advantage of the risk-off mood on Tuesday and recovered a portion of the losses that it recorded in the second half of the previous week. However, a broad-based USD strength in the last few hours made it difficult to push higher and the pair met a short-term resistance near $1285. As of writing, the pair was trading near $1282.

Although the dismal performance of major European equity indexes allowed the safe-haven gold to gather strength today, the greenback continued to find the demand to cap the pair’s gains. Ahead of existing home sales data from the United States, the US Dollar Index is up 0.1% on the day at 96.42.

Meanwhile, Wall Street opened lower on Tuesday to show that the risk-off mood continues to dominate the markets. As of writing, the Dow Jones Industrial Average and the S&P 500 were both down 0.7% on the day. Markets will be paying close attention to developments about the U.S. government shutdown and if stock markets fail to stage a recovery later in the day, we could see gold gain traction and push higher.

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