Gold stages technical correction, posts modest gains above $1270
- Gold finds support after dropping to 2019 lows below $1270.
- US Dollar Index stays in upper half of this week's range.
- Markets' eyes are on Wall Street opening bell.
Pressured by the Wall Street rally and the broad USD strength on Tuesday, the XAU/USD pair dropped to its lowest level of the year at $1266.22. With the trading action turning subdued on Wednesday, the pair staged a technical correction and was last seen trading around $1274, adding around $1.6 on the day.
Markets today will be paying close attention to the performance of the major equity indexes in the U.S. Among today's noteworthy first-quarter earnings figures, telecommunication giant AT&T and Caterpillar both reported higher-than-expected revenues while Boeing met the market expectation of $22.9 billion but announced that its decision to withdraw its 2019 full-year forecast due to issues surrounding the 737 Max aircraft.
As we are closing on the opening bell, the S&P 500 Futures trade flat on the day, pointing to a quiet start to the day. If we see the stocks rally pick up steam today, the positive market sentiment could force the pair to reverse its course and target its 2019 low. Furthermore, the upbeat Q1 earnings figures, which revealed that the economic slowdown is not as severe as expected, caused investors to question the FOMC's dovish stance and ramped up the demand for the USD. At the moment, the DXY is up 0.07% on the day at 97.66.
There won't be any macroeconomic data releases from the U.S. today and the market's risk perception is likely to stay as the primary driver of the pair's action.
Technical levels to consider