Gold confined in narrow band below $1250 mark
- Gold fails to preserve modest recovery gains.
- DXY retraces last week's upside on Monday.
- US stocks start the week in a quiet manner.
After sliding to its lowest level since late July at $1243, the XAU/USD pair staged a technical correction during the first half of the trading day but failed to stay above the $1250 handle. As of writing, the XAU/USD was trading at $1247.40, losing 0.09%, or $1.2, on the day.
Following the mixed reaction to the critical employment report from the United States on Friday, the US Dollar Index is having a difficult time gaining traction on Monday as participants are getting ready for the FOMC to announce its monetary policy decisions. The last monetary policy statement of the year is also going to include the updated economic projections and the dot plot, which presents the 2018 rate hike forecasts of every individual committee members. At the moment, the DXY is at 93.76, down 0.09% on the day.
In the meantime, the market sentiment, which usually impacts traditional safe-havens' price action, is relatively neutral on the first day of the week. Despite news of an explosion in a busy bus terminal in New York, major equity indexes started the day flat and are now slightly higher with the Dow Jones Industrial Average and the S&P 500 indexes adding 0.12% and 0.18% respectively.
With no significant macroeconomic data releases in the remainder of the day, the pair is likely to extend its sideways course.
Technical outlook
The CCI indicator on the daily graph rose slightly above the -100 mark on Monday, suggesting that the bearish momentum is losing strength. On the downside, supports for the pair could be seen at $1243 (Dec. 8 low), $1235 (Jul. 20 low) and $1228 (Jul. 16 low). On the upside, resistances align at $1251 (daily high), $1264 (Dec. 7 high) and $1272 (200-DMA).