After jumping to a daily high above $1285 in the first hour of trading, the XAU/USD pair gradually erased its daily gains and slumped below the $1280 mark amid broad-based USD strength. As of writing, the pair was down a little over $1 on the day at $1277.85.
With hopes of the U.S. and China reaching a deal this week vanishing after President Trump says that he won't renegotiate the trade deal and lift the tariff rate to 25% and Chinese officials cancelling their trip to Washington this week, the flight-to-safety at the opening boosted the demand for the safer precious metal.
However, the risk-averse atmosphere helped the greenback outperform its rivals and forced the pair to reverse its direction. The US Dollar Index, which posted large losses on Friday amid disappointing PMI figures, was last up 0.22% on the day at 96.70. Although there won't be any macroeconomic data releases in the remainder of the day, the market sentiment could continue to drive the USD's pricing action.
Minutes before the opening bell, the S&P 500 Futures is losing nearly 1.7% on the day, suggesting that major equity indexes in the U.S. will start the day deep in the red. Moreover, the 10-year Treasury bond yield is down nearly 2% to confirm the risk-off mood.
Source : Fxstreet