Gold recovers from 10-day lows, turns green near $1190 on USD weakness

• US Dollar Index turns red below 96.
• Wall Street retraces the majority of its early losses.
• Markets ignore today's data from the U.S.

The XAU/USD pair fell to its lowest level since September 28 at $1183 earlier in the day and started to retrace its losses in the second half of the day as greenback failed to preserve its bullish momentum. As of writing, the pair was up $1 on the day at $1189.

Earlier in the day, the NFIB reported that the Business Optimism Index fell to 107.9 in September from 108.8 in August and missed the analysts' expectation of 108.9. Despite that disappointing reading, however, the US Dollar Index rose above the 96 mark to refresh its highest level in seven weeks as the dollar continued to find demand as an alternative to European currencies. Furthermore, Dallas Fed President Robert Kaplan stated that he was in favour of three more rate hikes until June 2019.

With the US T-bond yields losing their traction in the U.S. afternoon, the DXY reversed its course and turned negative on the day below 95.70 to help the pair retrace its downside.

On the other hand, after starting the day lower, major equity indexes in the U.S. recovered the majority of their losses to suggest an improved market sentiment, which makes it difficult for the safe-haven to precious metal to gather more strength.

Technical outlook

Despite this late recovery, the CCI indicator on the daily chart stays near the -100 mark to suggest that sellers are still in control of the price action. Additionally, the RSI indicator on the same chart stays below the 50 handle to confirm this view. On the downside, the initial support could be seen at $1183 (daily low/Oct. 8 low) ahead of $1173 (Aug. 15 low) and $1160 (Aug. 16 low). Resistances, on the other hand, are located at $1195 (50-DMA), $1200 (psychological level) and $1208 (Oct. 2 low).