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  • Gold’s shallow correction continues on Friday.
  • For the week, gold is still down more than $30.
  • US Dollar Index headed for a negative weekly close.

After spending the Asian session in a tight range above the $1175 mark, the troy ounce of the precious metal gathered momentum during the European trading hours and extended its upward correction to a new daily high at $1180. However, the pair, once again, failed to make a decisive move to break that level and retreated to $1178, where it was up $4, or 0.35%, on the day.

Today’s data from the United States showed that the UoM Consumer Confidence dropped to its lowest level in nearly a year at 95.3 and missed the market expectation of 98. The publication highlighted that consumers were reacting in a more negative way that they did in the past to rising prices. “The data indicate that consumers have little tolerance for overshooting inflation targets, and to the benefit of the Fed, interest rates now play a more decisive role in purchase decisions,” the UoM said.

The US Dollar Index, which reversed its course after touching the 97 mark earlier this week, edged lower on Friday and was last at 96.25, where it was down 0.35% on a daily basis.

Despite the modest recovery witnessed in the last two days, the XAU/USD pair is still down more than $30 for the week and sellers are likely to remain in control of the price action until the pair retakes the critical $1200 level.

Technical levels to consider

Resistances for the pair align at $1194 (Aug. 15 high), $1200 (psychological level) and $1208 (20-DMA). On the downside, supports could be seen at $1171 (daily low), $1160 (Aug. 16  low) and $1155 (Dec. 9, 2016, low).