Gold steadies above $1200 as trading volume thins out
- Risk-off mood helps gold recover above the critical $1200 mark.
- US Dollar Index sits above 95 on Monday.
- Trading action is likely to remain subdued in the remainder of the session.
With the US Dollar Index starting the week with a small bullish gap, the XAU/USD pair retreated to $1195 in the early Asian session but didn't have a hard time recovering above the critical $1200 handle. At the moment, the troy ounce of the precious metal is trading at $1201.80, up 0.07% on the day.
With the U.S markets enjoying the 3-day long Labor Day weekend, investors stay on the sidelines and seem hesitant to move away from safer assets amid the ongoing uncertainty surrounding the U.S. - Canada NAFTA negotiations and the U.S. - China trade conflict. Additionally, it's unlikely to see any sharp fluctuations ahead of this week's critical macroeconomic data releases. The US Dollar Index, which closed the previous week above the 95 handle, is moving sideways in a tight range on Monday and was last seen at 95.07, where it was virtually unchanged on a daily basis.
On Tuesday, the ISM and Markit Manufacturing PMI data will be featured in the calendar alongside with the IBD/TIPP Economic Optimism Index. Later this week, markets will be paying a close attention to speeches by the FOMC members as well as Friday's nonfarm payroll report.
Technical levels to consider
With a decisive break below $1200, the pair could extend its losses toward $1192 (Aug. 22 low) and $1184 (Aug. 23 low). On the upside, resistances align at $1204 (daily high), $1215 (50-DMA) and $1224 (Aug. 1 high).