Gold heads for first negative daily close in a week, trades around $1280

The ounce troy of the precious metal is giving back last weeks gains against the greenback on Monday with the XAU/USD pair trading at $1282.70, losing nearly $7, or 0.5%, on the day.

Gold, as a traditional safe-haven, is struggling to find demand as the geopolitical tension between the United States and North Korea seems to have eased at the start of the week with no fresh headlines on the subject crossing the wires. The improved risk sentiment could also be seen in the sharp rebound of the major equity indexes in the U.S. as well. In fact, the Dow Jones Industrial Average is gaining 0.6% while the S&P 500 is up 0.9% on the day.

• Dollar Index gains momentum and rises to test Friday’s highs

In the meantime, the demand for the greenback remains solid on Monday, pushing the US Dollar Index to a fresh daily high at 93.40 in the NA session. During an interview with the Associated Press, William Dudley, the president of the Federal Reserve Bank of New York, said that he was in favor of another rate hike in 2017 given that the economy evolves as expected. He further added that he was expecting the inflation to move higher in the near-term, supporting the greenback's recovery. At the moment, the DXY is at 93.30, up 0.35%.

• Fed's Dudley: Still sees US growth at 2%

The pair's price action is likely to be driven by the DXY's movements in the next couple of session as the economic calendar won't be featuring any significant data.

Technical outlook

The CCI indicator on the daily graph eased back below the 100 mark, suggesting that the bullish momentum is fading away. The pair could face the first technical support at $1267 (20-DMA) ahead of $1256 (Aug. 2 low) and $1251 (Aug. 8 low). On the flip side, resistances could be encountered at $1291 (Aug. 11 high), $1300 (psychological level) and $1308 (Nov. 2, 2016, low).