Gold slumps to $1190 region as DXY surges to 94.30.
|- US Dollar Index jumps to a fresh session high near 94.30 in the early NA session.
- Latest Brexit headlines trigger a sharp drop in GBP/USD.
- XAU/USD turns flat on the week.
The XAU/USD pair came under heavy bearish pressure and broke below the critical $1200 level to extend its fall to a new 9-day low at $1192. As of writing, the pair was down $14, or 1.15%, on the day at $1193.
The pair's recent drop seems to be caused by a stronger greenback in the early NA session. Although there were no macroeconomic data releases from the United States that could have provided a boost to the greenback, a sharp fall witnessed in the GBP/USD pair following British Prime Minister Theresa May's Brexit statement seems to be ramping up the demand for the USD. Ahead of the PMI data, the index was up 0.42% at 94.30.
Despite the Brexit headlines, major European equity indexes are looking to end the week on a strong note with German DAX and the UK's FTSE adding 0.7% and 1.5%, respectively, at the moment. Furthermore, Wall Street started the day higher to confirm the high risk appetite, which makes it difficult for the safe-haven precious metal to show resilience against the buck. In the first couple of minutes following the opening bell, the Dow Jones Industrial Average was up 0.25% while the S&P 500 was gaining 0.2%.
Technical levels to consider
The initial support for the pair aligns at $1188 (Sep. 11 low) ahead of $1183 (Aug. 24 low) and $1173 (Aug. 15 low). On the upside, resistances align at $1200 (psychological level), $1210 (daily high) and $1217 (Aug. 10 high).
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