Gold rises above $1,500 on souring market mood
- No-deal Brexit fears weigh on the market sentiment on Thursday.
- Upbeat PMI data from the US helped USD gather strength.
- US Dollar Index rose to a fresh weekly high above 97.70.
The XAU/USD pair spent a large portion of the day moving sideways near the $1,490 handle before gaining traction during the American trading hours boosted by the risk-off flows. As of writing, the pair was trading at $1,502.05, adding more than $10, or 0.7% on a daily basis.
On Thursday, British Prime Minister Boris Johnson said that he will be calling for a general election on December 12. On the other hand, EU27 leaders will be announcing their decision on the UK's request for an extension on Friday and resurfacing fears that a short extension would trigger a no-deal Brexit seems to be forcing investors to fell to safe-haven assets such as the precious metal. Reflecting the sour mood, the 10-year US Treasury bond yield is losing more than 1% on the day.
USD capitalizes on GBP sell-off, upbeat data
On the other hand, the heavy selling pressure surrounding the GBP/USD pair is helping the Greenback find demand during the American session. The US Dollar Index, which has been moving sideways near 97.50, rose to its highest level in a week at 97.78 and was last seen at 97.65, up 0.2% on the day.
Additionally, the IHS Markit's preliminary Purchasing Managers' Index (PMI) report for October showed that the economic activity in the service and the manufacturing sectors expanded at a stronger pace than they did in September to provide additional support to the USD.
Technical levels to watch for
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.
