Gold edges lower toward $1200 as DXY gains traction above 93

• DXY recovers above 93 on upbeat data from the U.S.
• US Stocks pare early losses to turn flat on the day.
• Gold down more than $15 on the week.

After recovering a small part of yesterday's losses, the XAU/USD pair lost traction in the NA session and dropped to a fresh daily low at $1271.43. As of writing, the pair was trading at $1272, losing $3, or 0.23%, on the day.

Manufacturing sector remains healthy in the U.S.

According to the data released by Markit, the seasonally adjusted final Manufacturing Purchasing Managers’ Index (PMI) in the United States registered 53.9 in November, beating the market expectation of 53.8. Moreover, underlying details of the report showed that the employment sub-index advanced to its best level since June 2015 while input prices continued to rise, ramping up the expectations of a higher PPI reading in the short-term. Other data also revealed that construction spending grew by 1.4% on a monthly basis in October following a dismal 0.3% rise in September.

Supported by the robust data, the US Dollar Index advanced to a fresh daily high at 93.21, increasing the selling pressure on the pair. At the moment, the index was at 93.15, up 0.15% on the day. In the meantime, after starting the day on a weak note, major equity indexes in the U.S. retraced their losses with both the Dow Jones Industrial Average and the S&P 500 indexes turning flat in the last hour, making it difficult for the safe-haven precious metal to show resilience against the USD. Latest news from the U.S. suggests that Senate Republicans are poised to pass their tax bill, and if that materializes later in the day, stocks could push higher and continue to weigh on the pair.

Technical outlook

With a weekly close below $1272.70 (200-DMA), the pair could push lower in the short-term and aim for $1263 (Oct. 27 low) and $1251 (Aug. 8 low). On the upside, resistances could be seen at $1281 (50-DMA), $1293 (Nov. 24 high) and $1300 (psychological level). In the meantime, the CCI indicator on the daily graph remains below the -100 mark, suggesting that the bearish momentum is still strong.