Gold remains on track to close with small losses below $1340
|- US Dollar Index steadies above mid-97s in the NA session.
- Wall Street clings to modest daily gains following the positive start.
The XAU/USD pair, which closed higher on the weekly chart for the fourth straight time last week, is fluctuating in a relatively tight range on Monday amid a lack of significant fundamental drivers that had a lasting impact on the greenback's market valuation or the risk perception. As of writing, the XAU/USD pair was down 0.2% on a daily basis at $1338.70.
Major equity indexes in the U.S. started the day in the positive territory on Monday and remain on track to post modest gains to hint at a slightly positive market sentiment that makes it difficult for the traditional safe havens such as the precious metal find demand. Furthermore, investors seem to be refraining from making large bets ahead of the critical FOMC meeting on Wednesday, at which the bank is expected to address the financial markets' expectations of rate cuts.
Previewing this event, "With trade tensions likely to escalate, this Wednesday’s Fed meeting looks set to confirm market expectations - precautionary interest rate cuts are coming," said ING analysts in a recently published article.
On the other hand, despite a quick drop following the disappointing Empire State Manufacturing Survey, the US Dollar Index climbed above the 97.50 mark and was last up 0.1% on the day at 97.55 to keep the bearish pressure on the pair intact. Similar to stock markets, however, the FX market is also waiting for the FOMC to announce its monetary policy decisions and we are unlikely to see any surprises in the DXY's movements until then.
Technical levels to watch for
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