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  • Uncertainty surrounding China – U.S. trade conflict weighs on the sentiment.
  • US Dollar Index fails to surpass 97, goes into consolidation ahead of FOMC minutes.

After staying quiet near $1225 during the European trading hours, the XAU/USD pair gained traction in the last hour and rose to a fresh daily high of $1228. As of writing, the pair was trading at $1227, adding a little more than $6, or 0.5%, on a daily basis.

Earlier in the session, the data published by the U.S. Bureau of Economic Analysis showed that the annual core PCE price index, which excludes volatile food and energy prices, rose 1.8% in October to fall short of the market expectation of 1.9%. However, the report also revealed that personal spending and personal income both increased more than expected on a monthly basis to help the greenback limit its losses.  

Before the FOMC releases the minutes of its November meeting, the US Dollar Index is down 0.1% on the day at 96.73.

On the other hand, major equity indexes in the U.S. started the day in the negative territory and extended their decline in the first half of the session as investors are trying to assess US President Trump’s remarks on the trade conflict. After saying that there was “a long way to go” on China tariffs, Trump told reporters that they were “close to doing something” with China on trade to confuse investors. At the moment, the Dow Jones Industrial Average is down 0.55% on the day while the S&P 500 is erasing 0.6%.

Technical levels to consider

The initial resistance for the pair aligns at $1230 (Nov. 21 high) ahead of $1237 (Nov. 1 high) and $1243 (Oct. 26 high). On the downside, supports are located at $1220 (daily low/50-DMA), $1211 (Nov. 28 low) and $1206 (Nov. 9 low).