Gold stuck in tight range above $1290 ahead of US data
- Upbeat sentiment weighs on the precious metal.
- US Dollar Index retreats to 97 area.
- Coming up: ADP private sector employment and non-manufacturing PMI data from the U.S.
After gaining around $5 on Tuesday, the XAU/USD pair is staying relatively calm on Wednesday as the upbeat market sentiment doesn't allow the precious metal to take advantage of the broad USD weakness. As of writing, the pair was virtually unchanged on a daily basis at $1292.50.
The strong PMI data from the euro area and Germany today eased concerns over the economic slowdown in the eurozone and allowed stock markets to gain traction. Earlier in the day, China Caixin Services PMI improved to 54.4 in March from 51.1 in February to help Asian equity indexes finish the day with decisive gains. At the moment, the Euro Stoxx 50 is up 0.8% on the day while Germany's DAX is adding more than 1%. Furthermore, another more-than-1% upsurge seen in the 10-year US T-bond yield is confirming the risk-on mood as well.
On the other hand, the US Dollar Index, which benefited from safe-haven flows lately, reversed its course today ahead of the critical data releases from the United States. While markets are waiting for the ADP's private sector employment data and the non-manufacturing PMI reports of both the IHS Markit and the ISM, the DXY is losing around 0.3% on the day near 97.
Technical levels to consider
The pair could find the first resistance at $1300 (psychological level) ahead of $1308 (50-DMA) and $1317 (Mar. 20 high). On the downside, supports align at $1290 (daily low), $1285 (Apr. 2 low) and $1280 (Mar. 7 low).