Gold advances to multi-week highs above $1280 as US stocks open lower

• The troy ounce of precious metal is up nearly $10 on the day.
• US Dollar moves sideways in recent range below the 95 handle.
• US stocks open lower amid tax reform talk. 

The XAU/USD pair rose to its highest level since October 20 at $1285 as the negative market sentiment ramped up the demand for the traditional safe-haven gold. At the moment, the pair is trading at $1284, adding 0.73% on the day.

US stocks under pressure for second straight session

On Tuesday, market chatter about the tax bill getting watered down in order to receive the needed support from Democrats impacted the market sentiment negatively and weighed on the major equity indexes in the U.S. It seems like investors continue to stay away from risk-sensitive assets on Wednesday as well with the Dow Jones Industrial Average and the S&P 500 both losing 0.15% during the first half of the NA session. 

• US stocks retreat from record highs

In the meantime, the US Dollar Index, which failed to hold above the 95 mark on Tuesday, treads water below that level on Wednesday amid a lack of fresh fundamental drivers and allows the pair to preserve its bullish momentum. The DXY is at 94.75 at the moment, down 0.05% on the day. With no macroeconomic data scheduled to be released in the remainder of the day, the inverse correlation between the pair and stock markets are likely to drive the price action.

Technical levels to consider

With today's upsurge, the CCI indicator on the daily graph rose above the 100 mark, suggesting that the bullish momentum is building up. The immediate hurdle for the pair could be seen at $1291 (Oct. 19 high) ahead of $1300 (psychological level) and $1306 (Oct. 16 high). On the downside, supports could be seen at $1275 (daily low/20-DMA), $1268 (200-DMA) and $1260 (Oct. 6 low).