Gold consolidates daily gains above $1310 toward the end of the week
|- Wall Street recovers a large part of early losses.
- US Dollar Index steadies above 96.50.
- Gold looks to close the week with small losses.
In the absence of significant macroeconomic data releases in the second half of the day, investors stayed focused on the markets' risk perception and the precious metal gained traction by finding demand as a safe-haven. The XAU/USD pair extended its recovery that started following the dip to a weekly low of $1302 yesterday and rose above $1310 earlier in the session on its way to a fresh daily high of $1315.70 before going into a consolidation phase toward the end of the week. As of writing, the pair was up $4.7, or 0.35%, on the day at $1314.80 while only losing around $2 on the week.
The downward revisions to 2019 growth expectations in the euro area and in the UK yesterday brought fears of the global economy underperforming in the medium-term back to the surface and allowed the precious metal gather strength in the second half of the week. Additionally, reports of President Trump not looking to meet Chinese President Xi before the March 1 deadline further weighed on the risk appetite.
However, with the major equity indexes in the U.S. retracing a large portion of the bearish opening gap the pair struggled to push higher and started to move sideways in the upper-half of its daily range.
Meanwhile, the greenback also took advantage of the weakening risk appetite and outperformed its major rivals such as the GBP and the EUR during the week. At the moment, the DXY is on its way to posting its highest weekly close of 2019 above 96.60.
Technical levels to consider
$1300 (psychological level/20-DMA) aligns as the first critical support for the pair ahead of $1297 (Jan. 28 low) and $1285 (50-DMA). On the upside, resistances could be seen at $1315 (daily high), $1319 (Feb. 3 high) and $1326 (Jan. 31 high).
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