Gold tumbles to fresh session lows around $1330 on high risk-appetite

The precious metal is having a difficult time finding demand on Monday amid a positive market sentiment and erasing last week's gains against the USD. As of writing, the XAU/USD pair was down more than $16, or 1.2%, at $1330.

Last Friday, the pair spiked up to its highest level in more than a year at $1357 before closing the week at $1345 as investors sought refuge in safer assets on rising concerns over the potential impact of the Hurricane Irma and a possible ballistic missile test by North Korea. However, North Korea held a massive celebration on its founding day on Saturday and refrained from escalating the tension, and Irma lost strength as it hit Florida on Sunday, allowing the risk appetite to return to markets. At the moment, the Dow Jones Industrial Average and the S&P 500 are gaining 1.2% and 1% respectively while the 10-year US T-bond yield is adding more than 3%. 

On the other hand, the greenback staged a decisive recovery on Monday with the US Dollar Index adding 0.6% on the day and increasing the pressure on the pair. With no significant data releases in the remainder of the day, the pair is unlikely to change direction.

Technical outlook

The CCI indicator on the daily graph is moving closer to the 0 mark, suggesting that the correction could extend in the near-term. The initial support for the pair could be seen at $1326 (Sep. 5 low) ahead of $1325 (20-DMA) and $1300 (psychological level). On the upside, resistances align at $1340 (daily high), $1350 (Sep. 7 high) and $1357 (Sep. 8 high).