- Risk-off mood helps the precious metal preserve last week’s gains.
- European equity indexes post heavy losses, 10-year US T-bond yield loses more than 2%.
- US Dollar Index gains traction on Monday, rises to fresh 11-day highs.
After spending the majority of the previous week moving sideways near the critical $1,500 handle, the XAU/USD pair gained traction on Friday and resurfacing concerns over the US and China failing to reach a trade agreement and closed the week with small gains near $1,516. With the market sentiment remaining sour on Monday, the pair inched higher to $1,521 earlier today and was last seen trading at $1,518, adding 0.1% on the day.
The disappointing from the euro area today revived worries over a protracted economic slowdown and caused the market sentiment to turn sour. Additionally, European Union’s Chief Brexit Negotiator Barnier today said that the UK’s proposals on the Irish border were unacceptable and said that there was no basis for reaching a deal to further weigh on the sentiment.
The 10-year US Treasury bond yield turned south to confirm the dismal mood and is losing more than 2% today while major European equity indexes are suffering heavy losses.
Eyes on US PMI data
On the other hand, the selling pressure surrounding the EUR and the GBP allowed the Greenback to gather strength to cap the pair’s gains for the time being. At the moment, the US Dollar Index is up 0.23% on the day at 98.70. Later in the session, the IHS Markit’s preliminary September PMI data will be looked upon for fresh impetus.
Technical levels to watch for
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