Gold turns positive above $1300 despite improved risk sentiment
|- Weak data from the US keep the buck under pressure.
- Wall Street starts the day on a positive note.
- Gold struggles to determine a short-term direction and stays in its weekly range.
For the third straight day, the troy ounce of gold is having a difficult time moving away from the $1300 handle despite the sharp shifts in the market sentiment. After slumping down to $1296, the XAU/USD pair recovered its daily losses and was last seen trading at $1301.50, where it was up $2.5, or 0.2% on the day.
Although some positive political developments from Italy helped the risk appetite come back to the markets, the heavy selling pressure witnessed on the greenback limited the pair's losses. With European currencies finding an opportunity to erase a big portion of their losses against the USD, the US Dollar Index fell to 94.20 during the European session. In the second half of the day, the disappointing macroeconomic data releases from the United States didn't allow the greenback to gain traction.
The private sector employment change published by the ADP showed a 178K increase in May, which failed to meet the experts' estimate of 190K. Furthermore, the Q1 GDP growth expectation was reduced to 2.2% in the second estimate from 2.3%. Later in the session, the Fed is going to publish its Beige Book, which consists of survey data gathered from the 12 Federal Reserve districts. As of writing, the SXY was down 0.45% near 94.40.
Technical outlook
Since the beginning of the week, the XAU/USD pair is fluctuating in a relatively narrow $12 range. $1307 (200-DMA) remains as the first critical resistance ahead of $1319 (50-DMA) and $1332 (Apr. 24 high). On the flip side, supports could be seen at $1300 (psychological level), $1292 (May 24 low) and $1282 (May 21 low).
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