Gold struggles to move into positive territory amid improved risk sentiment
The precious metal is having a difficult time retracing its losses against the greenback in the NA session on Wednesday amid higher risk appetite. As of writing, the XAU/USD is trading at $1,241.45, losing 1$, or 0.08% on the day.
Although the greenback failed to gain traction on better-than-expected data from the United States in the early trading hours of the session, the pair failed to gather a bullish momentum as the major equity indexes started the day higher after yesterday's volatile session. At the moment, the Dow Jones Industrial Average is gaining 0.15% while the S&P 500 Index is up 0.4%, suggesting that investors are focused on riskier assets rather than a safe haven like Gold.
Nevertheless, the XAU/USD is still gaining more than $10 since the beginning of the week and continues to trade above the critical 200-DMA. On the other hand, the weakness surrounding the greenback, which has been the driving force of the pair's latest upsurge, seems to have faded away on Wednesday with the US Dollar Index moving at 94.57, up 0.13% on the day.
In the short-term, the market sentiment could impact the pair's price action as the economic calendar won't be featuring any significant data.
Technical outlook
The CCI indicator on the daily graph started to move lower towards the 100 mark, signaling that the bullish momentum is losing strength. The initial hurdle aligns at $1250 (50-DMA) ahead of $1259 (Jun. 23 high) and $1266 (Jun. 15 high). On the downside, supports could be seen at $1230 (20-DMA), $1225 (200-DMA) and $1215 (Jul. 14 low).
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.
