Gold retreats from two-month highs, continues to trade above $1510

USD weakness remains the main market theme on Monday.
Heightened tensions in the Middle East weigh on the sentiment.
Gold remains on track to end 2019 above $1500.

Eren Sengezer FXStreet

The XAU/USD pair gained more than $30 last week supported by the broad-based USD weakness and closed at $1511. With the poor performance of major Asian equity indexes and heightened geopolitical tensions in the Middle East, the pair stretched higher at the start of the week and renewed its best level in more than two months at $1515.90 before going into a consolidation phase. As of writing, the pair was up only 0.08% on the day at $1511.75.

Reports revealing US airstrikes against the Iranian-backed Kataib Hezbollah militia in Syria and Iraq over the weekend caused geopolitical tensions to escalate on Monday. According to Iranian state news agency IRNA, "US military aggression against Iraqi soil and Iraqi forces is strongly condemned as a clear example of terrorism," Iranian Foreign Ministry spokesman Abbas Mousavi said.

Persistent USD weakness heading into 2020

In the meantime, the year-end capital flows and investors' position adjustment continue to weigh on the greenback and help the pair stay in the positive territory. Ahead of Goods Trade Balance and Pending Home Sales data from the US, the US Dollar Index is down 0.2% on the day at 96.82.

Markets' risk perception and the USD' performance are likely to continue to drive the pair's action before investors take a one day break on Wednesday.

Technical levels to watch for

XAU/USD

Overview
Today last price	1512.46
Today Daily Change	1.59
Today Daily Change %	0.11
Today daily open	1510.87

Trends
Daily SMA20	1479.35
Daily SMA50	1478.52
Daily SMA100	1492.7
Daily SMA200	1418.83

Levels
Previous Daily High	1517.4
Previous Daily Low	1507.5
Previous Weekly High	1517.4
Previous Weekly Low	1477.55
Previous Monthly High	1515.38
Previous Monthly Low	1445.8
Daily Fibonacci 38.2%	1511.28
Daily Fibonacci 61.8%	1513.62
Daily Pivot Point S1	1506.45
Daily Pivot Point S2	1502.02
Daily Pivot Point S3	1496.55
Daily Pivot Point R1	1516.35
Daily Pivot Point R2	1521.82
Daily Pivot Point R3	1526.25

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.

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