Gold drops to session lows as US stocks turn positive
Pressured by the improving risk appetite, the precious metal slipped to session lows below $1250 during the NA session. At the moment, the XAU/USD is down $4.4, or 0.35%, at $1251.50.
After having a flat start to the day, major equity indexes in the U.S. gathered momentum as the upbeat sentiment surrounding the crude oil lifted the energy shares. As of writing, the S&P 500 was up 0.4% while the Dow Jones Industrial Average gained 55 points or 0.27%. The barrel of West Texas Intermediate is up 0.88% at $51.60.
Furthermore, the greenback is also gaining strength as the yield on 10-year U.S. Treasury notes turned higher to 2.365% (+0.31%). The US Dollar Index rose to 100.60 area after having stayed in a narrow range around 100.50 during the first few trading hours of the American session.
Eyes on NFP and Trump - Xi summit
Despite today's drop, the precious metal continues to stay in the weekly trading channel, and it could remain there at least until the markets see tomorrow's NFP data or the headlines from the meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping.
- Critical first encounter between US President Trump and his Chinese counterpart Xi – Lloyds Bank
Technical outlook
The 200-DMA at $1244 could be seen as the first technical support before $1236 (50-DMA) and $1231 (Mar. 2 low). On the upside, a break above $1258 (daily high) could aim for $1261.15 (Apr. 4 high) and $1263.75 (Feb. 27 high).
- Gold: Mixed fundamentals for 2017 – Natixis
