Gold edges lower toward $1225 as DXY sticks to small gains
- XAU/USD fails to hold above $1230 on Monday.
- US Dollar Index stays slightly above 94.50 in the NA session.
- Wall Street starts the day in the red, remains quiet.
After making a decisive recovery on Friday and closing the week near $1230, the XAU/USD pair struggled to extend its gains amid a relatively subdues trading action. With the greenback gathering some strength in the early NA session, the pair started erasing Friday's upside and was last seen at $1225, losing around $7, or 0.6% on the day.
The data from the U.S. on Monday showed that the Chicago Fed's National Activity Index improved to 0.43 in June from -0.45 in May. On the other hand, existing home sales contracted by 0.6% in June following May's 0.7% decrease as the low supply continued to push up real estate prices. Despite the mixed data, the US Dollar Index is holding on to its small daily gains. As of writing, the index was up 0.1% on the day at 94.58.
In the meantime, major equity indexes in the United States started the day in the negative territory helping the pair limit its losses for the time being as the negative market sentiment allows traditional safe-havens to find some demand. At the moment, the Dow Jones Industrial Average and the S&P 500 indexes are down 0.2% and 0.07% respectively.
There won't be any other macroeconomic data releases in the remainder of the day and the pair is likely to continue to fluctuate in its daily range.
Technical levels to consider
On the downside, the initial support aligns at $1223 (daily low) ahead of 1211 (Jul. 19 low) and $1200 (psychological level). Resistances, on the other hand, are located at $125 (daily high), $1243 (20-DMA) and $1249 (Jul. 12 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.
