Gold fails to extend rebound, returns to $1280 area
- Core PCE Price Index in the U.S. continues to edge lower.
- US Dollar Index continues to float above the 98 mark.
- 10-year US T-bond yield adds nearly 1% on the day.
The XAU/USD pair started the new week under bearish pressure and erased a large portion of last week's gains. Although the pair staged a modest rebound during the European trading hours and advanced above $1284, it failed to gather further strength and, once again, turned south. As of writing, the pair was trading near $1280, losing more than $6 on a daily basis.
The 10-year US T-bond yield gained traction on Monday and erased last Friday's losses by adding nearly 1% and pointed out to improved market sentiment, which makes it difficult for the precious metal to find demand as a safe-haven.
Meanwhile, the greenback's pullback that started on Friday after the GDP data painted a mixed picture regarding the economic performance of the U.S. in the first quarter of the year lost its momentum on Monday, allowing the US Dollar Index to stay near the 98 handle and keeping the bearish pressure on the pair intact. At the moment, the index is clinging to modest gains at 98.05.
Today's data from the U.S: showed that the core Personal Consumption Expenditure (PCE) Price Index, the Fed's preferred gauge of inflation, fell to 1.6% in March to miss the market expectation of 1.7%. On a positive note, personal spending increased by 0.9% in the same period following February's reading of 0.1%.
Technical levels to consider
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.
