- Upbeat tone surrounding global equities boosts Wall Street.
- Greenback preserves strength after inflation data.
After inching higher to $1235, the XAU/USD pair struggled to push higher and erased its daily gains. In the early NA session, the pair was relatively quiet near $1230, where it was down $3 on a daily basis.
The upbeat tone surrounding the global equity indexes points to a higher risk appetite on Monday, which hurts the demand for safe havens such as the precious metal. Following a sharp fall on Friday, European stocks started the week on a positive note and allowed Wall Street to gather strength at the opening bell. As of writing, the Dow Jones Industrial Average was up 0.83% on the day while the S&P 500 was adding 1.7%.
In the meantime, today’s data from the U.S., once again, revealed that the Fed has no reason to be doubtful about another 25bps rate hike in December. The U.S. Bureau of Economic Analysis reported that the annual core PCE price index remained steady at the Fed’s target of 2% in September. The US Dollar Index, which stayed relatively calm around mid-96s for the majority of the day, inched higher on the back of the data and was last seen at 96.70.
In the absence of significant macroeconomic data releases in the remainder of the day, the risk perception and the DXY’s movements could continue to drive the pair’s price action.
Technical levels to consider
On the upside, resistances could be seen at $1235 (daily high), $1243 (Oct. 26 high) and $1255 (Jun. 29 high). Supports, on the other hand, align at $1228 (daily low), $1222 (Oct. 24 low) and $1215 (Oct. 12 low).
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