Gold turns positive above $1300 despite improved risk sentiment

Weak data from the US keep the buck under pressure.
Wall Street starts the day on a positive note.
Gold struggles to determine a short-term direction and stays in its weekly range.

For the third straight day, the troy ounce of gold is having a difficult time moving away from the $1300 handle despite the sharp shifts in the market sentiment. After slumping down to $1296, the XAU/USD pair recovered its daily losses and was last seen trading at $1301.50, where it was up $2.5, or 0.2% on the day.

Although some positive political developments from Italy helped the risk appetite come back to the markets, the heavy selling pressure witnessed on the greenback limited the pair's losses. With European currencies finding an opportunity to erase a big portion of their losses against the USD, the US Dollar Index fell to 94.20 during the European session. In the second half of the day, the disappointing macroeconomic data releases from the United States didn't allow the greenback to gain traction.

The private sector employment change published by the ADP showed a 178K increase in May, which failed to meet the experts' estimate of 190K. Furthermore, the Q1 GDP growth expectation was reduced to 2.2% in the second estimate from 2.3%. Later in the session, the Fed is going to publish its Beige Book, which consists of survey data gathered from the 12 Federal Reserve districts. As of writing, the SXY was down 0.45% near 94.40.

Technical outlook

Since the beginning of the week, the XAU/USD pair is fluctuating in a relatively narrow $12 range. $1307 (200-DMA) remains as the first critical resistance ahead of $1319 (50-DMA) and $1332 (Apr. 24 high). On the flip side, supports could be seen at $1300 (psychological level), $1292 (May 24 low) and $1282 (May 21 low).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram