Gold clings to daily recovery gains above $1280
- Risk aversion helps precious metal find demand.
- US Dollar Index rises for the third straight day.
- Wall Street looks to open the day in the negative territory.
After losing $5 on Tuesday, the troy ounce of the precious metal gained value today with the sour market sentiment ramping up the demand for traditional safe-havens. At the moment, the XAU/USD pair is up 0.4%, or $5.3, on the day at $1284.70.
With the ongoing U.S.-China trade conflict not showing any signs of slowing down, investors are opting out to stay away from risk-sensitive assets. Following a more-than-2% fall on Tuesday, the 10-year US Treasury bond extended its slide and was last seen losing 1.65% to reflect the dismal market mood. Meanwhile, the S&P 500 Futures is erasing 0.7% on the day and hints at a negative opening on Wall Street.
The fact that there won't be any significant macroeconomic data releases from the U.S. today suggests that the risk perception is likely to continue to dominate the market action.
On Thursday, the U.S. Bureau of Economic Analysis will release its second estimate of the first quarter GDP growth, which is expected to tick down to 3.1% from 3.2%. During the Asian session on Friday, Manufacturing and Non-Manufacturing PMI data from China will be looked upon for fresh impetus as a positive reading could help the risk appetite return to markets and vice versa.
Technical levels to consider
The pair could face the initial resistance at $1285 (20-DMA/20-DMA/daily high) ahead of $1291 (May 8 high) and $1297 (100-DMA). On the downside, supports could be seen at $1279 (daily low), $1272 (200-DMA) and $1269 (May 21 low).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
