Gold finds resistance near $1300, loses nearly $20 for the week

• 10-year US T-bond yield eases from daily highs.
• Dİsappointing inflation data from the U.S. limits greenback’s gains.
• US Dollar Index looks to close the week above 97.20.

After slumping to its lowest level in three weeks at $1286.66, the XAU/USD pair staged a strong rebound but failed to break above the critical $1300 threshold. With the trading action turning subdued in the last couple of hours, the pair is moving in a tight range near the $1293 handle, adding a little over $3 on a daily basis. Despite today’s recovery, the pair looks to close the week around $20 lower.

The decisive correction witnessed in the US Treasury bond yields in mid-week weighed on the precious metal and triggered a technical selling wave after the pair broke below $1300 and allowed investors to remain in control of the price action. 

Although the 10-year T-bond yield rose more than 1% on Friday, it pulled away from its daily highs to help the pair cling to its modest gains. Furthermore, following a positive start to the day boosted by renewed optimism surrounding the U.S.-China trade negotiations, Wall Street struggled to push higher to point out to a neutral sentiment ahead of the weekend.

On the other hand, the US Dollar Index, which advanced to its best level since March 11 at 97.34, lost its traction after the data published by the U.S. Bureau of Economic Analysis showed that the core PCE price index eased to 1.8% on a yearly basis in January and moved further away from the Federal Reserve’s 2% target. At the moment, the DXY is up only 0.04% on a daily basis at 97.25.

Technical levels to consider

With a daily close above $1300 (daily high/psychological level), the pair could target $1310 (50-DMA) and $1319 (Mar. 27 high). On the downside, supports are located at $1286 (daily low), $1280 (Mar. 7 low) and $1276 (Jan. 24 low).