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Gold moves sideways below $1280 as US equity futures point to a positive start

  • S&P 500 futures up 0.55% ahead of the opening bell.
  • US Dollar Index stays in the red near 96.20 ahead of data.

The XAU/USD pair rose to its highest level in more than 6 months at $1282 earlier today but struggled to preserve its bullish momentum. As of writing, the troy ounce of the precious metal was trading near $1279, adding 0.3% on a daily basis.

The flight-to-safety and the broad-based selling pressure on the USD helped the pair extend its weekly rally yesterday. However, with the market sentiment improving modestly ahead of the New Year holiday, the U.S. equity futures are pointing to a positive start to the day to limit the pair's gains. At the moment, the S&P 500 futures and the Dow Jones Industrial Average futures are up 0.55% and 1.15% on the day, respectively.

On the other hand, as markets are waiting for the last data set of the year from the U.S., the US Dollar Index, which tracks the dollar's value against a basket of six major currencies, drops 0.38% on the day at 96.20 to show that the buck struggles to find demand. 

Despite the USD weakness, however, a decisive recovery in Wall Street could cause the pair to continue to erase this week's gains.

Technical levels to consider

The initial resistance for the pair aligns at $1282 (daily high) ahead of $1294 (Jun. 3 high) and $1300 (psychological level). On the downside, supports are located at $1274 (daily low), $1264 (Dec. 26 low) and $1258 (Dec. 24 low).

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