Gold approaches critical $1500 handle after sudden jump
- Thin market liquidity triggers sudden price spikes on Tuesday.
- US Dollar Index erases daily gains, turns red near 97.60.
The XAU/USD pair rose sharply in the last hour and touched its highest level since early November at $1499.50 as thin liquidity conditions seem to be causing prices to fluctuate sharply into the London fix. As of writing, the pair was up 0.95%, or $14, on the day at $1499.
USD weakens modestly ahead of Christmas break
In the meantime, the data published by the Federal Reserve Bank of Richmond on Tuesday showed that the manufacturing activity in the Fifth Fed District continued to lose momentum in December with the headline Composite Index slumping to -5 from -1 in November. This reading came in worse than the market expectation and weighed on the greenback to help the pair stretch higher. As of writing, the US Dollar Index was down 0.04% on the day at 97.63.
With US stock and bond markets closing early today, the pair could struggle to preserve its momentum to break above the critical $1500 mark.
Technical levels to watch for
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