Gold steadies near $1290 as risk-off mood offsets USD strength

• December inflation figures meet expectations in the U.S.
• US Dollar Index recovers daily losses, turns positive above 95.50.
• Wall Street looks to snap 5-day winning streak.

After climbing to the $1295 area earlier in the day, the XAU/USD pair came under strong bearish pressure in the early NA session and slumped to $1287 before finding support and going into a consolidation phase. As of writing, the pair was up 0.3% on the day at $1290.

Today’s data from the U.S. showed that the core CPI, which strips volatile energy and food prices, increased 2.2% on a yearly basis in December to match November’s reading and the market expectation. With data not offering any surprises, the US Dollar Index stayed relatively quiet. However, a sudden buying wave hit the currency and lifted the US Dollar Index to its highest level of the day at 95.76 to weigh on the XAU/USD pair.

On the other hand, with major equity indexes in the U.S. having a hard time carrying the rally into a 6th day on Friday, the risk appetite weakened and helped the precious metal retrace its drop. At the moment, the Dow Jones Industrial Average and the S&P 500 were both down around 4% and the Nasdaq Composite was losing 0.67% on the day.

Technical levels to consider