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Gold finds support ahead of $1270 as US stocks turn negative

  • Gold fails to hold above $1280 on greenback strength.
  • Negative market sentiment in the session keeps the losses limited.
  • DXY stays in consolidation below 95 ahead of Yellen's speech.

The XAU/USD pair, which closed the previous day with a $10 gain a little above the $1280 handle, came under pressure on Tuesday and refreshed its session low at $1272. As of writing, the pair was trading at $1275, down $6.5, or 0.5%, on the day.

Positive data supports greenback's recovery

Today's upbeat data from the United States lifted the US Dollar Index to its highest level since July 17 at 95.07 and weighed on the pair. The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, improved to its best level in seven months at 53.6 in November while the JOLTS Job Openings stayed virtually unchanged at 6.1 million with the number of hires coming in at 5.3 million in September. However, the DXY struggled to hold above the 95 mark as no other fundamental drivers supported the index's upside.

  • US: Number of job openings was little changed at 6.1 mln in September
  • US: Economic Optimism Index rises across every category in November - IBD/TIPP

In the meantime, after touching their intraday record highs in the first hour of the NA trading session, major equity indexes reversed course as the uncertainty surrounding the GOP tax plan weighed on the investors' sentiment. At the moment, the Dow Jones Industrial Average and the S&P 500 are both losing 0.1% on the day.

With no other macroeconomic data left in the remainder of the session, the DXY and the risk appetite are likely to dominate the price action of the pair in the short-term.

Technical outlook

Despite today's drop, the CCI indicator on the daily graph moves sideways a little above the 0 mark, suggesting that sellers are not in control yet. Moreover, the pair continues to fluctuate in its two-week-old range. $1278 (20-DMA) remains as the initial hurdle for the pair ahead of $1291 (Oct. 19 high) and $1300 (psychological level). On the downside, supports could be encountered at $1268 (200-DMA), $1260 (Oct. 6 low) and $1251 (Aug. 8 low).

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