Gold rises above $1,500 on souring market mood
- No-deal Brexit fears weigh on the market sentiment on Thursday.
- Upbeat PMI data from the US helped USD gather strength.
- US Dollar Index rose to a fresh weekly high above 97.70.
The XAU/USD pair spent a large portion of the day moving sideways near the $1,490 handle before gaining traction during the American trading hours boosted by the risk-off flows. As of writing, the pair was trading at $1,502.05, adding more than $10, or 0.7% on a daily basis.
On Thursday, British Prime Minister Boris Johnson said that he will be calling for a general election on December 12. On the other hand, EU27 leaders will be announcing their decision on the UK's request for an extension on Friday and resurfacing fears that a short extension would trigger a no-deal Brexit seems to be forcing investors to fell to safe-haven assets such as the precious metal. Reflecting the sour mood, the 10-year US Treasury bond yield is losing more than 1% on the day.
USD capitalizes on GBP sell-off, upbeat data
On the other hand, the heavy selling pressure surrounding the GBP/USD pair is helping the Greenback find demand during the American session. The US Dollar Index, which has been moving sideways near 97.50, rose to its highest level in a week at 97.78 and was last seen at 97.65, up 0.2% on the day.
Additionally, the IHS Markit's preliminary Purchasing Managers' Index (PMI) report for October showed that the economic activity in the service and the manufacturing sectors expanded at a stronger pace than they did in September to provide additional support to the USD.
Technical levels to watch for