Gold drops to $1290 area, eyes on Wall Street opening bell
- European stocks slide on Monday, S&P 500 futures point to a negative open in Wall Street.
- US Dollar Index stays in daily range near 95.60.
After posting weekly gains for the fifth straight time last week, the XAU/USD pair pushed higher on Monday but lost its momentum before reaching the critical $1300 mark. As of writing, the pair was adding more than $2, or 0.2%, on the day at $1290.
Today's data from the euro area showed a higher-than-expected decline in the industrial production and weighed on the market sentiment. Additionally, escalating fears over the UK's Parliament voting down the Brexit deal later this week keep the interest high for traditional safe-havens such as the precious metal. At the moment, Germany's DAX is down 0.6% on the day while the UK's FTSE is losing more than 1%. Furthermore, the S&P 500 futures erase 0.8% to suggest that Wall Street is likely to start the day in the negative territory, which could help gold gather strength in the second half of the day.
On the other hand, the US Dollar Index, for now, is limiting its daily losses to cap the pair's upside. The US Dollar Index was last down only 0.05% on the day at 95.62. With an empty economic docket in the U.S., the risk perception is likely to stay as the sole drive of the pair's price action.
With today's climb, the CCI indicator on the daily chart reached the 100 mark, suggesting that buyers remain in control. However, the pair could extend its gains only with a decisive break above the $1300 mark, which stayed intact despite several attempts last week. Above that level, the pair could aim for $1309 (Jun. 14, 2018, high) and $1315 (May 15, 2018, high). On the downside, supports are located at $1282 (20-DMA), $1276 (Jan. 4 low) and $1266 (Dec. 27, 2018, low).