Gold inches closer to $1270 on North Korea headlines
The XAU/USD pair dropped to a session low at $1263.70 following the Consumer Sentiment data from the United States but quickly recovered as the latest headlines suggested that the geopolitical tension continued to rise with North Korea. As of writing, the XAU/USD was trading at $1267.75, 0.26% up on the day.
On Friday, U.S. Secretary of State Rex Tillerson said called upon the U.N. to implement sanctions and suspend diplomatic relations with North Korea and added that all options of responding to future provocation by North Korea remain on the table. Also speaking at the U.N. meeting, UK Prime Minister Theresa May noted that they would continue to work with international partners to maintain pressure on North Korea.
- U.S. Secretary of State Tillerson: Threats of nuclear attack on Japan and South Korea 'are real'
- British PM May: North Korean missile tests represent threat to global peace and stability
Boosted by the increasing demand for safe havens, the precious metal gathered strength against the greenback and inched closer to $1270, where a strong resistance have formed after continuous failed attempts.
On the other hand, despite a renewed buying interest surrounding the greenback, the US Dollar Index is having a difficult time moving above the 99 handle and is further supporting XAU/USD's recent upsurge. At the moment, the DXY is at 98.90, down 0.12% on the day.
Technical outlook
With a clean break above $1270, the XAU/USD could aim for $1288 (Apr. 21 high) and $1295 (Apr. 17 high). To the downside, $1260 (Apr. 26 low) could be seen as the first support ahead of $1249 (50-DMA) and $1239 (200-DMA).
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.
