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Gold edges higher toward $1290 on N. Korea headlines

  • Safe-haven gold gathers strength on geopolitical concerns.
  • Upbeat data from the U.S. allows DXY to retrace its losses.
  • XAU/USD remains on track to close the second straight week higher.

Following Thursday's choppy sessiın, the XAU/USD pair gained traction on the last day of the week and advanced to a fresh 2-day high at $1287.12. At the moment, the pair is trading at $1286.90, adding 0.65%, or $8, on the day.

North Korea backs away from negotiations with the U.S.

In the last hour, Reuters reported that N. Korean envoy said that no negotiations would take place with the United States on nuclear issues as long as they continued with their military exercises with South Korea. This recent headline dented the risk appetite and allowed traditional safe-havens such as gold, the JPY, and the CHF find demand. In fact, the USD/JPY pair fell to its lowest level in a month at 112.33, and the USD/CHF pair lost nearly 30 pips to test the 0.99 handle.

Earlier in the session, the robust macroeconomic data from the U.S. helped the greenback continue to recover its daily losses. On a monthly basis, building permits rose by 5.9% while housing starts increased by 13.7% in October, both readings beating the market estimates. After turning flat at 93.85, the US Dollar Index struggled to preserve its bullish momentum and was last seen at 93.65, losing 0.2% on the day.

  • US: Building permits in October were at 1,297,000, 5.9% above September

With no more significant data left in the remainder of the day, the pair is likely to track the changes in the market sentiment.

Technical levels to consider

The pair could encounter the first hurdle at $1290 (Nov. 15 high) ahead of $1300 (psychological level) and $1306 (Oct. 16 high). On the downside, supports are located at $1281 (50-DMA), $1276 (20-DMA) and $1270 (200-DMA). With today's advance, the CCI indicator on the daily graph rose above the 100 mark, suggesting that bulls are gathering strength.

USD/JPY holds weaker near multi-week lows, below mid-112.00s

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