Gold recovers daily losses amid falling stocks

The precious metal was able to recover its daily losses in the last few hours as the major stock indexes in the U.S. accelerated their downfall, triggering a flight to safety. The XAU/USD pair is up nearly $1 on the day at $1287.40 at the moment.

However, the US Dollar Index has been holding on to its daily gains around 100.50, making it difficult for Gold to gather a bullish momentum. Meanwhile, the 'big event' North Korea had planned turned out to be a ribbon cutting ceremony for Ryomyong Street, a residential high-rise project, easing the geopolitical concerns over a possible nuclear strike.

Wall Street remained under pressure on Thursday weighed by bank stocks. As of writing, the Dow Jones Industrial Average was down 0.52% while the S&P 500 dropped 12 points or 0.5%. 

Technical outlook

The daily RSI for the precious metal remains above 70, suggesting overbought conditions and signaling towards a potential technical correction before the next leg up. The yellow metal faces the initial hurdle at $1288.50 before $1296 (Nov. 7 high) and $1300 (psychological level). To the downside, supports are aligned at $1272 (Apr. 12 low), $1261 (Apr. 4 high) and $1254 (20-DMA).