- US Dollar Index returns to 97 area after advancing to 97.20.
- Gold looks to snap 2-day winning streak.
After gaining a total of $17 on Monday and Tuesday, the XAU/USD pair staged a technical correction today and retreated to $1233 in the day before recovering a large portion of its daily losses. As of writing, the pair was trading at $1238, losing only 50 cents on a daily basis.
The U.S. Treasury yield curve inversion earlier this week, which is taken as an early indicator of an economic slowdown, triggered a flight-to-safety and allowed traditional safe havens such as the precious metal gather strength against its rivals while weighing heavily on the stock markets. With the U.S. markets staying closed on Wednesday, the pair found an opportunity to consolidate its recent gains. However, amid a lack of signs suggesting a shift in the market mood, the pair's losses stayed limited.
Meanwhile, the US Dollar Index, which advanced to a daily high at 97.20, retreated to the 97 area and started to move sideways near that level reflecting the subdued market action.
On Thursday, the data from the U.S., the ADP private sector employment, third-quarter nonfarm productivity, trade balance, and weekly jobless claims, will be looked upon for fresh impetus. Additionally, investors will be paying a close attention to the bond market.
Technical levels to consider
The first critical resistance for the pair aligns at $1243 (200-DMA) ahead of $1248 (Jul. 12 high) and $1260 (Jul. 10 high). On the downside, supports are located at $1233 (daily low), $1226 (Nov. 5 low) and $1222 (50-DMA).
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