Gold retraces daily gains, looks to close the day flat near $1213
- Fed's Evans' remarks lift the DXY to a fresh 3-day high.
- Wall Street trades mixed on Thursday.
- XAU/USD stays directionless in its weekly range.
After holding on to small recovery gains for the majority of the day, the XAU/USD pair came under a modest pressure in the late NA session and retraced its upside. As of writing, the pair was trading at $1213, where it was virtually unchanged on the day.
Major equity indexes in the United States started the day flat and struggled to find direction on Thursday to show a neutral risk perception in the markets, which allowed gold to stay resilient against the buck. However, comments from Chicago Fed President Charles Evans provided a boost to the USD and weighed on the pair.
Evans, who used to sound skeptical regarding two more rate hikes in the remainder of the year, said that the inflation was steady near the Fed's 2% target rate and two rate hikes until the end of the year would be reasonable. This change in Evans' tone helped the US Dollar Index reach its highest level since Monday at 95.50. Following the initial upsurge, the index went into a consolidation phase and was last seen up 0.4% on the day at 95.47.
Tomorrow, participants will be watching the inflation report from the United States. The annual core-CPI is expected to rise to 3% in July from 2.9% in June and a positive reading is likely to help the greenback close the week on a strong note.
Technical outlook
The initial support for the pair is located at at $1207 (Aug. 8/Aug. 6 low) ahead of $1200 (psychological level) and $1194 (Mar. 10, 2017, low). On the upside, resistances could be seen at $1220 (20-DMA), $1234 (Jul. 25/26 high) and $1249 (50-DMA).