Gold retreats from February highs, trades near $1315 as US stocks post strong gains
|- Wall Street starts the day on a strong note on renewed trade optimism.
- US Dollar Index pulls away from 2019 highs, steadies above 97.
The XAU/USD pair rose to its highest level of February near $1320 in the early NA session but lost its traction as the improved market sentiment made it difficult for the safe-haven precious metal to preserve its strength. As of writing, the pair was trading a little above $1315, adding 0.25% on a daily basis.
Chinese news agency Xinhua today reported that the U.S. and China were moving closer to a final deal and explained that both sides reached consensus in principle on major issues and "had specific discussions about a memorandum of understanding on bilateral economic and trade issues."
Later in the day, President Trump said that they were closer to have a real trade deal with China than the U.S. ever was and announced that he will be meeting his Chinese Counterpart Xi after the talks in Washington next week. Boosted by the improved market sentiment, major equity indexes in the U.S. started the day in the positive territory and continued to push higher. At the moment, the Dow Jones Industrial Average and the S&P 500 area adding 1.35% and 0.8%, respectively.
Meanwhile, today's disappointing industrial production data from the U.S. weighed on the greenback and forced the US Dollar Index to ease from the 2019-high that it set earlier in the session. Nevertheless, the DXY remains on track to post weekly gains for the second straight week.
Technical levels to consider
The pair could face the initial support at $1310 (daily low/20-DMA) ahead of $1300 (psychological level) and $1293 (50-DMA). On the upside, resistances are located at $1320 (daily high), $1326 (Jan. 31 high) and $1332 (Apr. 24, 2018, high).
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