- The precious metal struggles to find direction for the second straight day.
- US Dollar Index stays calm near 97.
- Investors will pay a close attention to Wall Street and US data.
Boosted by the risk aversion earlier in the day, the XAU/USD pair advanced above the $1240 but struggled to extend this move as the greenback continued to stay strong. As of writing, the pair was virtually unchanged on the day at $1237.
The uncertainty surrounding the Brexit vote next week and concerns over Italy's budget crisis continue to keep investors away from European currencies and risk-sensitive assets such as stocks. Additionally, the escalating political tension between the United States and China is seen as a factor that could put trade negotiations in jeopardy. At the moment, major European equity indexes are losing more than 2% to suggest that Wall Street is likely to open the day with sharp losses.
Although the precious metal as a safe-haven takes advantage of the risk-off mood, the broad-based greenback strength seems to be offsetting any potential gains in the pair. Ahead of the critical ADP employment report and trade balance data from the U.S., the US Dollar Index is sitting comfortably above the 97 mark. In addition to the data, FOMC members Williams, who voiced his support for further gradual rate hikes earlier this week, and Bostic will be delivering speeches.
Technical levels to consider
The pair could face a stiff resistance at $1243 (200-DMA) ahead of $1248 (Jul. 12 high) and $1260 (Jul. 10 high). On the downside, supports are located at $1233 (Dec. 5 low), $1226 (Nov. 5 low) and $1222 (50-DMA).
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