Gold retreats to $1290 area as greenback takes advantage of the upbeat data
- US Dollar Index edges higher above 96 following today's data.
- Wall Street looks to open modestly lower on Thursday.
- Gold stays stuck in its 2-week old range below $1300.
The troy ounce of the precious metal lost some value in USD terms in the last hour as the greenback was able to record modest gains on the back of upbeat macroeconomic data releases. After advancing to the $1295 earlier in the day, the XAU/USD pair edged down to $1290 area, where it was down $3.5 on a daily basis. Despite this recent price action, however, the pair continues to fluctuate in its two-week-old range, preserving its near-term neutral outlook.
Today's data from the U.S. showed that the weekly jobless claims came in at 213K in the week ending January 11 to better the market expectation of 220K. Moreover, the Philly Fed Manufacturing Survey showed that the business activity in the region's manufacturing sector expanded at a higher-than-expected pace with the headline Business Conditions Index improving to 17 in January from 9.1 in December. With the initial reaction to the data, the US Dollar Index rose to a daily high of 96.17 before retreating slightly. As of writing, the DXY was up 0.04% on the day at 96.11.
Meanwhile, major equity indexes in the U.S., which were able to end the previous day higher, are looking to start the day in the negative territory amid modest losses witnessed in pre-market trading. If Wall Street struggles to extend its rally, the precious metal could continue to stay resilient against the buck.
Key technical levels
With a decisive break above $1298/$1300 (Jan. 4 high/psychological level) the pair could target $1303 (Jun. 15, 2018, high) and $1309 (Jun. 14, 2018, high). On the downside, supports align at $1287/$1285 (Jan. 15 low/20-DMA), $1280 (Jan. 9 low) and $1276 (Jan. 4 low).