The precious metal was able to recover its daily losses in the last few hours as the major stock indexes in the U.S. accelerated their downfall, triggering a flight to safety. The XAU/USD pair is up nearly $1 on the day at $1287.40 at the moment.
However, the US Dollar Index has been holding on to its daily gains around 100.50, making it difficult for Gold to gather a bullish momentum. Meanwhile, the ‘big event’ North Korea had planned turned out to be a ribbon cutting ceremony for Ryomyong Street, a residential high-rise project, easing the geopolitical concerns over a possible nuclear strike.
Wall Street remained under pressure on Thursday weighed by bank stocks. As of writing, the Dow Jones Industrial Average was down 0.52% while the S&P 500 dropped 12 points or 0.5%.
The daily RSI for the precious metal remains above 70, suggesting overbought conditions and signaling towards a potential technical correction before the next leg up. The yellow metal faces the initial hurdle at $1288.50 before $1296 (Nov. 7 high) and $1300 (psychological level). To the downside, supports are aligned at $1272 (Apr. 12 low), $1261 (Apr. 4 high) and $1254 (20-DMA).