Gold eases off weekly highs, turns flat near $1204 as stocks push higher

After advancing to its highest level in a week at $1208.40, the XAU/USD pair lost its traction as the precious metal struggled to find demand in the risk-on environment. As of writing, the pair was virtually unchanged on the day at $1204.

Earlier in the day, a broad-based selling pressure witnessed on the greenback helped the pair extend higher. The US Dollar Index, which tracks the greenback against a basket of six major currencies, fell to its lowest level since early July at 93.83. With some positive macroeconomic data releases from the U.S., the index started to retrace its losses and was last seen still down 0.5% on the day at 94.06.

The weekly jobless claims in the U.S. edged down to 201K in the week to September 14 and the Philly Fed Manufacturing Index rose to 22.9 from 11.9 to beat the analysts' estimate of 17. Finally, existing-home sales stayed unchanged on a monthly basis in August following July's 0.7% decline. Commenting on the report, "U.S. existing home sales, by far the largest portion of the real estate market, have stabilized at pre-bubble levels,  but purchases are unlikely to move higher until there is a sustained increase in wages," FXStreet Senior Analyst Joseph Trevisani said.  

Meanwhile, following yesterday's mixed trading session, major equity indexes started the day on a strong note and the Dow Jones Industrial Average advanced to a fresh record high to provide a boost to the S&P 500 and the Nasdaq Composite, which were last seen up 0.65% and 0.85% on the day.

There won't be any other macroeconomic data releases in the remainder of the day and the market's risk perception is likely to stay as the primary driver of the pair's price action.

Technical levels to consider

The pair could encounter the first technical support at $1200 (psychological level/20-DMA) ahead of $1192 (Sep. 17 low) and $1187 (Sep. 11 low). On the upside, resistances align at $1208 (daily high), $1213 (Sep. 13 high) and $1220 (Aug. 3 high).