Gold continues to fluctuate in narrow band above $1310
- Broad-based USD strength weighs on XAU/USD on Wednesday.
- Wall Street struggles to cling to daily gains.
- 10-year T-bond yield stays in the negative territory.
The XAU/USD pair was able to post moderate gains on Tuesday but failed to push higher today as the broad-based USD strength didn't allow the pair to preserve its momentum. As of writing, the pair was down 0.22% on the day at $1312.45.
After closing the previous day above 96, the US Dollar Index continued to climb higher with major European currencies struggling to attract investors amid the disappointing macroeconomic data releases from the euro area and the uncertainty surrounding Brexit negotiations and the BoE's policy outlook, which will be revealed on Thursday. The DXY today rose to its highest level in nearly two weeks at 96.28 and was last up 0.2% on the day at 96.26.
Additionally, today's data from the U.S. showed that the trade balance decreased by more than expected in November to help the greenback outperform its major rivals.
Meanwhile, following a flat start to the day, major equity indexes in the U.S. struggled to gain traction and are now staying in the negative territory to point to a relatively weak market sentiment that helps the precious metal limit its losses as a safe-haven. Furthermore, the 10-year T-bond yield is losing 0.75% on the day to confirm the risk-averse mood.
Technical levels to consider
Resistances for the pair align at $1317 (Feb. 5 high) ahead of $1326 (Jan. 31 high) and $1332 (Apr. 24, 2018, high). On the downside, supports could be seen at $1308 (Feb. 4 low), $1300 (psychological level/20-DMA) and $1288 (Jan. 17 low).