Gold fails to hold above $1310 following the spike in early NA session

• Disappointing retail sales data from the U.S. weighs on the dollar.
• US Dollar Index recovers losses, rises above 97.20.
• Wall Street rebounds modestly, stays in the red.

The XAU/USD pair jumped to a fresh daily high near $1313 after the disappointing retail sales data from the United States weighed on the greenback. However, with the US Dollar Index staging a rebound in the last hour, the pair erased some of its gains and was last seen trading near $1309, where it was still up 0.27% on a daily basis.

According to the U.S. Census Bureau, retails sales in December declined by 1.2% in December to miss the market expectation of +0.2% by a wide margin. The initial reaction to the data dragged the US Dollar Index back toward the 97 area from 2019 high that the index set earlier in the day at 97.30. At the moment, the index is virtually unchanged on the day at 97.20.

On the other hand, the risk-off mood in the NA session allows the precious metal to limit its losses against the buck. Earlier today, citing  sources from both sides, Bloomberg reported that the U.S. and China were still far away from a deal amid the lack of progress on the structural reforms to China’s economy the U.S. requires. Major equity indexes in the U.S. are all in the negative territory to reflect the dismal market mood and the 10-year T-bond yield is down 1.75%.

There won’t be any macroeconomic data releases from the U.S. in the remainder of the day and the risk perception is likely to stay as the primary driver of the pair’s price action.

Technical levels