Gold drops below $1270 on rising index futures

Eren Sengezer FXStreet

The precious metal is extending yesterday's losses on Tuesday and is approaching the ten-day low, which was set yesterday at $1265. At the moment, the XAU/USD pair is trading at $1268, down 0.57% on the day.

As the investors digest the upbeat Q1 earnings, yesterday's relief rally continues to be felt in the markets as well, pushing the U.S. stock index futures higher. Dow e-minis 1YMc1 were up 60 points, or 0.29%, S&P 500 e-minis ESc1 were up 3.75 points, or 0.16%, and Nasdaq 100 e-minis NQc1 were up 9.5 points, or 0.17%.

US: Q1 earnings mostly above expectations

Global stocks, rallied on Monday as the centrist and pro-European Union candidate Emmanuel Macron won the first round of the French presidential election. Although the momentum faded a little on Monday, the rally continued with Nikkei adding more than 1% in Asia, while the Germany's DAX was up 0.15% and UK's FTSE was adding 18 points during the European session.

On the other hand, the US Dollar Index has been having a difficult time staying above the 99 mark, but 98.80 has formed a strong support, limiting further losses in the greenback and not allowing the XAU/USD to make an upward correction.

Technical outlook

The pair could face the immediate support at $1265 (Monday's low), ahead of $1248 (50-DMA) and $1240 (200-DMA). To the upside, resistances align at $1274 (Monday's high), $1288 (Apr. 21 high) and $1295 (Apr. 17 high).

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.

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