Gold drops below $1330 as USD recovers modestly

Greenback pares early losses to move into the positive territory.
Risk-on mood weighs on safe-havens on Monday.

Eren Sengezer FXStreet

The XAU/USD pair failed to hold above the $1330 mark on Monday and came under modest bearish pressure in the second half of the day. As of writing, the troy ounce of the precious metal was trading at $1327.50, losing 0.05% on the day. Despite that recent drop, however, the pair's price action doesn't hint at a sustained movement in either direction with the CCI indicator on the daily chart moving sideways a little above the 0 mark.

Heightened optimism about the possibility of the U.S. and China reaching a trade deal made it difficult for safe-havens to find demand on Monday after U.S. President Trump announced that he delayed the increase in tariffs on Chinese imports that was originally scheduled to go into effect on March 1. The risk-on mood allowed investors to focus on risk-sensitive stocks and all the three major indexes in the U.S. were last seen adding around 0.4% - 0.5%.

Additionally, the upsurge seen in the T-bond yields supported the greenback in the second half of the day and helped the US Dollar Index pull away from its daily lows around 96.30. With markets quieting down toward the last hours of the NA session, the DXY was moving sideways near mid-96s where it closed the previous week.

Technical levels to consider

XAU/USD

    Daily SMA20: 1317.9
    Daily SMA50: 1294.28
    Daily SMA100: 1260.24
    Daily SMA200: 1234.53
Levels:
    Previous Daily High: 1333.11
    Previous Daily Low: 1321.85
    Previous Weekly High: 1346.85
    Previous Weekly Low: 1320.72
    Previous Monthly High: 1326.25
    Previous Monthly Low: 1275.9
    Daily Fibonacci 38.2%: 1328.81
    Daily Fibonacci 61.8%: 1326.15
    Daily Pivot Point S1: 1322.52
    Daily Pivot Point S2: 1316.55
    Daily Pivot Point S3: 1311.26
    Daily Pivot Point R1: 1333.78
    Daily Pivot Point R2: 1339.07
    Daily Pivot Point R3: 1345.04

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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