Gold drops below $1290 as Wall Street pushes higher

• The US 10-year T-bond yield gains more than 1.5% on Wednesday.
• Wall Street gathers strength after starting the day in the green.
• US Dollar Index looks to close in the negative territory for the second straight day.

The XAU/USD pair lost its traction in the early NA session and erased its modest daily gains as the risk-on atmosphere weighed on the precious metal, which is seen as a traditional safe-haven. After dropping to a session low near $1288, the pair went into a consolidation phase and was last seen trading near $1290, losing around $2 on the day.

The strong performance of European and Asian equity indexes on the back of strong PMI data from China, Germany, and the euro area helped Wall Street to start the day in the positive territory. With the improved market sentiment boosting the demand for stocks, the Nasdaq Composite was last up 1.1% on the day while the S&P 500 was adding 0.6%. Additionally, the 10-year US T-bond yield, a good indicator of the market's risk perception, has recently advanced above 2.5%, rising more than 1.5% on a daily basis. 

Meanwhile, the US Dollar Index is struggling to retrace its daily fall following disappointing Markit Services PMI and ISM Non-Manufacturing PMI data to keep the pair's losses limited. Additionally, the ADP's monthly report showed that the private sector employment increased by less than expected in March. At the moment, the DXY is down 0.3% on the day near 97.

• US: ADP - Private sector employment increased by 129K in March vs 170K expected.

Technical levels to consider

$1300 (psychological level) stays as a critical resistance ahead of $1308 (50-DMA) and $1317 (Mar. 20 high). On the downside, supports could be seen at $1288 (daily low), $1285 (Apr. 2 low) and $1280 (Mar. 7 low).