Gold advances to new multi-month top at $1355 as USD bleeding continues

The XAU/USD pair received an additional boost from the unstoppable USD sell-off in the NA session and advanced to its best level since early September at $1355. As of writing, the pair was trading at $1354, up nearly $13, or 0.95%, on the day.

Nothing seems to be helping the USD breathe a sigh of relief on Wednesday. Today's data, released by Markit, showed that the business activity in the manufacturing sector in the Unşted States expanded at a faster-than-expected rate while the Services PMI disappointed as it fell to 53.5 from 53.7. On the other hand, the 10-year US T-bond yield continued to push higher above 2.65% on Wednesday and was last seen at 2.656% where it was adding 1.3% on a daily basis. Nevertheless, the greenback failed to find any demand and the DXY was down 0.85% at 89.10 as of writing.

Sellers have been dominating the USD's price action since the start of the year. Today's comments from the U.S. Treasury Secretary Steven Mnuchin brought another selling wave. Mnuchin claimed that a weaker USD was favorable as it would boost exports. Although Secretary of Commerce Wilbur Ross later explained that Mnuchin was not advocating anything with the USD comment, investors remained focused on the main theme of the FX space.

Meanwhile, major equity indexes in the U.S. started the day on a positive note and surged to fresh record highs, pointing to an improved market sentiment in the NA session. The safe-haven precious metal could have a difficult time gathering strength is the risk appetite stays high.

Technical outlook

The first hurdle for the pair aligns at $1357.30 (Sep. 8 high). A decisive break above that level could open the door for further gains toward $1367 (Aug. 2, 2016, high) and $1375 (Jul. 10, 2016, high). On the downside, supports could be seen at $1340 (daily low), $1328 (20-DMA) and $1316 (Jan. 11 low).