Gold advances to fresh daily high above $1220 as Wall Street suffers heavy losses
- US stocks fall sharply on Monday.
- Risk-off mood helps precious metal gather strength.
- US Dollar Index stays on track to finish the day in the negative territory.
After dropping below the critical $1200 handle last Monday, the XAU/USD pair closed every day in the positive territory and looks to extend its winning streak on Monday. As of writing, the pair was up 0.2% on the day at $1224.
Although New York Fed President Williams today said that the Fed will continue with its gradual rate increases, this comment failed to help the greenback gather strength against its rivals. The US Dollar Index, which recorded large losses following some cautious remarks from Fed officials on Friday, extended its slide on Monday to a fresh 10-day low of 96.12. At the moment, the index is down 0.25% on the day at 96.20. The only data from the U.S. today showed that the NAHB Housing Market Index fell to 60 in November from 68 in October missed the market expectation of 67 by a wide margin.
In addition to the USD weakness, the flight-to-safety in the NA session helped gold find some extra demand. With the three major equity indexes in the U.S. losing between 1.7% and 3% on the day, investors continue to move towards safer assets.
Technical levels to consider
The pair could face the initial resistance at $1225 (Nov. 16 high) ahead of $1233 (Oct. 15 high) and $1240 (Oct. 23 high). On the downside, supports are located at $1218 (daily low), $1214 (50-DMA) and $1206 (Nov. 15 low). Meanwhile, the CCI indicator on the daily chart continues to climb toward the 100 mark, suggesting that the bullish momentum is building up.