Gold rebounds to $1230 as Wall Street opens in red and USD suffers losses

In the second half of the day, a broad-based selling pressure witnessed on the greenback is dominating the FX market. After having a tough time making a decisive recovery earlier in the day, the XAU/USD pair gained traction in the early NA session and touched a fresh 2-day high at $1232. As of writing, the pair was trading a little below the $1230 mark and was up 0.6% on the day.

Reiterating his dislike of the Federal Reserve's tightening strategy, US President Donald Trump argued that other major economies have been manipulating their currencies by keeping the interest rates lower and the U.S. economy was at a disadvantage due to a stronger dollar. "Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really?" Trump wrote on Twitter.

On the other hand, St. Louis Fed President Bullard said that a flattening yield curve had the potential to hurt the GDP growth and added that the Fed needed to hold off further rate hikes. Although Bullard said that Trump's remarks on the monetary policy wouldn't impact the FOMC's decisions, the buck couldn't find demand and the US Dollar Index was last seen down 0.65% on the day at 94.35.

In the meantime, major equity indexes in the United States started the day in the negative territory, reflecting a weak appetite for risk in the session and allowing the safe-haven precious metal to preserve its gains.

Technical outlook

Despite today's recovery, the pair remains on track to record losses for the week and the near-term bearish outlook remains intact with the RSI and the CCI indicators on the daily chart both supporting that view. On the upside, resistances align at $1232 (daily high), $1244 (20-DMA) and $1249 (Jul. 12 high). On the flip side, supports could be seen at $1220 (Jul. 18 low), $1211 (Jul. 19 low) and $1200 (psychological level).