|

Gold pulls away from 10-day highs, consolidates above $1260

  • US stocks surge to all-time highs on Monday.
  • Improved market sentiment caps Gold's gains.
  • DXY recovers above 93 and goes into a consolidation phase.

The XAU/USD pair, which was able to end the previous week $5 higher, extended its upside on Monday and reached its highest level in 10-days near $1264 before retracing a part of its daily earnings. As of writing, the pair was trading at $1261.76, adding 0.52% on the day.

Although the greenback failed to take advantage of the latest headlines that suggested the tax bill might be legalized later this week, major equity indexes started the day on a positive note and built on last Friday's gains to touch fresh record highs. As of writing, both the Dow Jones Industrial Average and the S&P 500 was adding 0.5% on the day. Meanwhile, after plummeting to its lowest level since early December at 92.92, the US Dollar Index gained some traction on the back of the US T-bond yields' upbeat performance. At the moment, the DXY is at 93.20, still down 0.3% on the day.

However, it's still early to assume that the pair could extend its recovery in the short-term as the most recent rise seem like a correction of the $50 drop that occurred during the first two weeks of December. Only a decisive break above the 200-DMA, which is located at $1272 could allow more buyers to come in and help the pair advance further.

Technical levels to consider

Above $1272 (200-DMA) the pair could aim for $1277 ahead of $1289 (Dec. 1 high). On the downside, supports align at $1252 (daily low), $1240 (Dec. 11 low) and $1236 (Dec. 12 low). In the meantime, the CCI indicator on the daily chart recently rose above the 0 mark, suggesting that the bearish pressure is not present anymore and the bullish momentum is slowly gaining strength.

Author

Eren Sengezer

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.

More from Eren Sengezer
Share:

Editor's Picks

EUR/USD looks sidelined around 1.1850

EUR/USD remains on the back foot, extending its bearish tone and sliding towards the 1.1850 area to print fresh daily lows on Monday. The move lower comes as the US Dollar gathers modest traction, with thin liquidity and subdued volatility amplifying price swings amid the US market holiday.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold loses momentum, eases below $5,000

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.