Gold rebounds to $1275, still down $5 on the day
The XAU/USD pair eased to its lowest level since since August 16 at $1271 before erasing a part of its daily losses in the early NA session. At the moment, the pair was trading at $1275, still losing 0.4%, or $5, on the day.
Despite a sharp upsurge witnessed in the US Dollar Index on Monday, the precious metal is showing some resilience against the buck as the political turmoil in the euro area keeps the demand for safe-havens alive. In fact, the XAU/EUR pair is gaining 0.25% on the day. Over the weekend, 90% of Catalans voted for independence from Spain in a disputed referendum. Although the turnout was only 42.3%, it was enough to revive the concerns over separatism in the euro area especially following the German election results from the previous week.
- Europe: Political dynamics taking control - BBH
In the meantime, investors are waiting for the day's only noteworthy data from the United States, the ISM, and the Markit manufacturing PMI data. In case the PMI data beat the market estimates, we could see the DXY try to push higher. Moreover, major stock indexes in the U.S. are looking to refresh their record levels in the early trading hours of the NA session, which could make it difficult for the precious metal to keep its poise.
Technical outlook
The CCI indicator on the daily graph for the pair remains below the -100 handle, suggesting that the bearish pressure is still present. On the downside, with a break below $1271 (daily low), the pair could aim for $1261 (200-DMA) and $1251 (Aug. 8 low). On the upside, resistances align at $1290 (Sep. 29 high), $1300 (20-DMA/50-DMA/psychological level) and $1313 (Sep. 26 high).
- Gold - Speculators trimmed bullish net positions for the second week