Gold's corrective drop continues on Tuesday. DXY sticks to daily gains above 92. US stocks extend their upside to fresh all-time highs.
The XAU/USD pair started the second day of the week under pressure and dropped to a fresh 5-day low at $1308 in the early NA session. As of writing, the pair was trading at $1311, losing $9, or 0.7%, on the day.
Heightened expectations of the Fed going for another 25 bps rate hike in March allowed the greenback to preserve its strength against its peers with the US Dollar Index advancing to its highest level since late December at 92.36 in the early NA session. The data released by the U.S. Bureau of Labor Statistics on Tuesday showed that the number of job openings was little changed at 5.9 million in November. Although this data failed to meet the market expectation of 6.04 million, the US Dollar Index didn't have a difficult time staying near its recent highs. At the moment, the index is up 0.25% at 92.31.
Meanwhile, the upbeat performance of global equity indexes today kept the demand for the risk-sensitive precious metal low. Following yesterday's choppy trading action, major equity indexes in the U.S. started the day at fresh all-time highs. At the moment, the Dow Jones Industrial Average and the S&P 500 indexes are up 0.27% and 0.25% respectively.
The improved market sentiment could continue to weigh on the pair in the near-term. However, unless the pair makes a daily close below the critical $1300 mark, buyers could continue to look for opportunities to take control of the price action.
Technical outlook
The CCI indicator on the daily chart for the pair continues to edge lower toward the 0 mark, suggesting that the corrective slide is likely to continue. The first technical resistance for the pair aligns at $1321 (Jan. 2 high) ahead of $1334 (Sep. 14 high) and $1344 (Sep. 5 high). On the downside, supports could be seen at $1300 (psychological level), $1294 (Dec. 29 low) and $1286 (Dec. 28 low).
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