The XAU/USD pair traded for the sixth straight day in negative territory on Thursday pressured by the broad USD strength to touch its lowest level of the year at $1271. However, with the sour market mood helping the precious metal show resilience against the greenback, the pair rebounded modestly from its lows but could not break above the $1280 level. The disappointing PMI figures from Germany and the euro area put major European currencies under pressure thus ramping up demand for the greenback. Meanwhile, following a positive start to the day, major equity indexes in the US eased into the negative territory and the 10-year T-bond yield extended its slide to erase more than 1% on the day, allowing the yellow metal to take advantage of risk-off flows. With the trading volume thinning out ahead of the Easter holiday, the pair is unlikely to make any sharp move in either direction until next week.
Gold prices edged lower during yesterday's session to print their lowest level for this year at 1271.14 per ounce before recovering modestly later in the day. The yellow metal retreated from the oversold zone but the price remained capped below the 1280 level despite the divergence spotted between the momentum and the price. On this note, we will be focusing on the upside but we won't be expecting any large movements as the volume will dry ahead of Easter holiday.
Support: 1277.18/ 1270.1
Resistance: 1280.11/ 1282.19