Gold Price Analysis: XAU/USD retreats to $1,780 area ahead of key US data
- Gold lost its traction after climbing to multi-year highs near $1,790.
- US Dollar Index clings to modest gains around 97.50.
- ADP Employment Change and ISM Manufacturing PMI will be released from US.
After posting its highest daily close since October 2012 at $1,781.67, the XAU/USD pair extended its rally and came within a touching distance of $1,790 before losing its traction. As of writing, the pair was virtually unchanged on a daily basis at $1,781.
The uncertainty surrounding the impact of rising coronavirus cases' on the US economic recovery provided a boost to the safe-haven precious metal on Tuesday. Moreover, month-end flows triggered a fresh gold-buying wave and allowed the pair to stretch higher in the late American session.
Although Wall Street's main indexes closed the day in the positive territory, XAU/USD pair didn't have a difficult time preserving its gains amid broad-based selling pressure surrounding the greenback.
Eyes on US data
The recovery witnessed in the US Dollar Index (DXY) during the European session on Wednesday caused the pair to turn south. Ahead of the key ADP Employment Change and the ISM Manufacturing PMI data, the DXY is up 0.12% on the day at 97.50. More importantly, the FOMC will release the minutes of its June meeting at 1800 GMT
Meanwhile, the S&P 500 futures are down 0.6% on the day, suggesting that major equity indexes could open the day deep in the negative territory and trigger flight-to-safety.
Technical levels to watch for