Gold edges below $1200 as US dollar retraces daily losses
- Disappointing ADP report forces the dollar to weaken in the early NA session.
- ISM non-manufacturing PMI beats expectations.
- Wall Street stays in the negative territory.
The XAU/USD pair rose to a fresh 6-day high at $1207 earlier in the NA session but failed to preserve its momentum as the greenback started retracing its daily losses. As of writing, the pair was trading at $1198.50, still up 0.15% on the day.
The day's first data from the United States on Wednesday showed that the employment in the private sector increased 163K compared to the market expectation of 190K. Although the market reaction to the data weighed on the greenback, the ISM's non-manufacturing PMI helped it recover its losses. With 58.5 in August, the PMI reading showed that the business activity in the service sector grew at a more robust pace than it did in July. At the moment, the DXY is flat on the day at 95.12.
On the other hand, after starting the day lower, major equity indexes in the U.S. remain in the negative territory amid sharp falls witnessed in shares of big technology companies such as Twitter and Facebook. The risk-off mood in the session allows the safe-haven precious metal to limit its losses against major currencies.
Technical levels to consider
With a daily close above $1200, the pair could extend its recovery toward $1211 (50-DMA) and $1220 (Aug. 3 high). On the downside, supports could be seen at $1195 (20-DMA/daily low), $1189 (Sep. 4 low) and $1183 (Aug. 24 low).