Gold retraces daily losses and turns flat near $1244
Following a drop to a fresh two-month low at $1241.15, the XAU/USD pair started to recover its losses in the NA session and turned flat on the day. As of writing, the pair is trading at $1243.75, where it closed the previous day.
Although the greenback was able to record gains against its rivals on Tuesday, it lost its bullish momentum as the U.S. Treasury-bond yields remained under pressure with the 10-year reference losing 1.5%. After reaching a fresh session top at 97.52, the US Dollar Index eased a little and is now at 97.43, up 0.2% on the day.
- US Dollar consolidates daily gains near mid-97s
In addition to falling T-bond yields, the dismal performance of the major equity indexes in the U.S. suggests that the risk appetite is fading away, increasing the demand for the safe haven precious metal. At the moment, the Dow Jones Industrial Average is losing 0.2% while the S&P 500 is down 0.35%. Tomorrow's economic calendar won't be offering any data that could directly impact the pair's price action and the risk sentiment could remain as the primary driver.
Technical outlook
The CCI on the daily graph for the pair has turned flat below the -100 mark, suggesting that the bearish momentum is losing strength. $1235 (May 3 low) could be seen as the first technical support for the pair ahead of $1229 (200-DMA) and $1225 (May 4 low). On the upside, resistances align at $1248 (daily high), $1256 (50-DMA) and $1267 (20-DMA).
- Oil and gold prices under pressure, base metals higher - ANZ