Gold steadies near multi-month highs above $1325
- The precious metal builds on last week’s gains.
- US Dollar Index extends slide on Monday.
- Trading volume thins out in the NA session.
After closing the previous week $8 higher, the troy ounce of the precious metal started the week on a strong note and recorded steady gains to touch its highest level since April at $1327.50. However, the President’s Day holiday in the U.S. weighed on the trading volume in the last hours and caused the XAU/USD pair to go enter a consolidation stage. As of writing, the pair was up 0.35% on the day at $1236.
Although the market sentiment seems to have improved amid rising hopes for this week’s talks in Washington to lead to a final trade deal following President Trump’s optimistic tweet over the weekend, the safe-haven gold didn’t have a difficult time finding demand. The economic hardship the euro area is facing and the uncertainty surrounding Brexit negotiations are two of the main reasons why investors are still looking for a safer alternative.
Additionally, the broad-based selling pressure surrounding the greenback provided an additional boost to the pair. The US Dollar Index, which posted losses on Thursday and Friday last week, opened with a bearish gap and struggled to make a meaningful recovery in the absence of fundamental triggers. At the moment, the DXY is down 0.15% on a daily basis at 96.80.
Key technical levels
The initial resistance for the pair aligns at $1327.5 (daily high) ahead of $1332 (Apr. 25, 2018, high) and $1338 (Apr. 9, 2018, high). On the downside, supports could be seen at $1320 (daily low), $1313 (20-DMA) and $1300 (psychological level). Meanwhile, today’s upsurge lifted the CCI indicator on the daily chart above the 100 level, suggesting that buyers are in control of the price action.