Gold steadies at fresh multi-week highs near $1490
- Gold gains more than $10 in holiday-shortened week.
- US Dollar Index moves sideways above 97.70 ahead of mid-tier data.
Despite the subdued market activity, the XAU/USD pair gained traction on Monday and continued to push higher on Tuesday to touch its best level since early November at $1493. However, the lack of fundamental drivers and the absence of fresh geopolitical developments suggested that the pair's recent action is technical in nature.
US Dollar Index stays above 97.70
Earlier in the session, the Federal Reserve Bank of Philadelphia's Non-Manufacturing Index dropped to 13.4 in December from 20.7 in November but was largely ignored by the market participants. The US Dollar Index, which advanced to its highest level in more than two weeks at 97.82, was last seen adding 0.05% on the day at 97.72. The Federal Reserve Bank of Richmond's Manufacturing Index will be the last data release from the US ahead of the Christmas break.
In the meantime, the 10-year US Treasury bond yield is up 0.5% on the day to make it difficult for gold to find demand as a safe-haven. Wall Street will be open for a half-day on Christmas eve and is not expected to make any sharp fluctuations.
Weekly Jobless Claims on Thursday will be the only other macroeconomic data release from the US this week. Investors will be paying close attention to the impact of year-end flows on the pair as well.
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.
