Gold finds support ahead of $1300, recovers modestly to $1310

• Wall Street pares early gains, stays close to Friday’s closing levels.
• US Dollar Index looks to close the day above 97.

The XAU/USD pair fell to a daily low of $1303.80 in the early NA session before staging a modest rebound in the last couple of hours. As of writing, the pair was trading at $1309, losing a little over $5, or 0.4%, on a daily basis.

Major European equity indexes on Monday posted decisive gains and allowed Wall Street to start the day in the positive territory. Moreover, rising hopes of President Trump meeting his Chinese counterpart Xi ahead of the March deadline following the comments from a senior adviser provided an additional boost to the U.S. stocks as well. Nevertheless, with investors taking a step back while waiting for fresh developments surrounding the U.S. – China trade conflict and the government shutdown, both the Dow Jones Industrial Average and the S&P 500 erased their early gains to turn flat on the day.

Meanwhile, the unabated selling pressure on major European currencies continues to help the greenback preserve its bullish momentum and forces the pair to stay in the negative territory. At the moment, the DXY is at its highest level of 2019 at 97.06, up 0.45% on a daily basis.

Key technical levels

The pair could face the initial support at $1305 (20-DMA) ahead of $1300 (psychological level) and $1297 (Jan. 28 low). On the upside, resistances are located at $1315 (daily high), $1319 (Feb. 3 high) and $1326 (Jan. 31 high). With today’s drop, the CCI indicator on the daily chart broke below 0, suggesting that sellers are looking to take control of the pair’s near-term price action.