Gold tumbles below $1300 on improved market sentiment

After spending the majority of the day in a tight range above the $1300 handle, the XAU/USD pair came under pressure in the late NA session and lost nearly $10 to renew its session low at $1295. As of writing, the pair was at $1216, losing 0.6% on the day.

The improved market sentiment amid a report suggesting the possibility of North Korea and the United States re-establishing diplomatic relations seems to be the primary reason behind the pair's recent drop. As a traditional safe-haven, the precious metal is having a difficult time finding demand. The higher risk appetite is also reflected upon the major equity indexes in the U.S. At the moment, the Dow Jones Industrial Average is up 0.3% while the S&P 500 is gaining 0.05%.

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Furthermore, Bloomberg recently reported that Stanford University economist John Taylor was a top candidate to take over the Federal Reserve and helped the greenback gain traction. The US Dollar Index, which spent the last few hours moving sideways near the 93 mark, is now at 93.08, adding 0.17% on the day.

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Technical outlook

The CCI indicator on the daily graph continues to push lower below the 100 mark, suggesting that the bulls lost control over the price action. With a daily close below $1300, the pair could aim for $1286 (20-DMA), $1275 (Oct. 9 low) and $1265 (200-DMA). On the upside, resistances align at $1313 (Sep. 26 high), $1320 (Sep. 18 high) and $1333 (Sep. 12 high).