Gold slumps toward $1320 on greenback strength

The XAU/USD pair came under a new selling pressure during the first half of the NA session and dropped to its lowest level in 12 days at $1320. As of writing, the pair was trading at $1322, losing nearly $10, or 0.75%, on the day.

The pair's downfall seems to be a product of a recent surge in the demand for the greenback. Despite a lack of economic data that could impact the price action, the US Dollar Index pierced through the 92 mark to refresh its weekly high at 92.42 amid news of Trump administration finally taking solid steps towards keeping its promise to drop the corporate taxes to 15%. At the moment, the index is just a tad below that level, gaining 0.56% on the day.

During an interview with the Associated Press, Paul Ryan, Speaker of the U.S. House of Representatives, said that the outline of the tax reform was going to be released during the week of September 25. He further added that they were aiming to have the tax reform enacted into law by the end of 2017. U.S. House Ways and Means Committee Chair Kevin Brady also confirmed the time line. 

• US House Ways & Means Chair Brady: To release tax plan on week of Sep 25th
• U.S. House Speaker Ryan: Goal is to have tax reform enacted into law by year's end

In the meantime, major equity indexes in the U.S. are having a tough time extending their gains into the third straight day on Wednesday, not allowing the risk appetite to take control of the price action and helping the precious metal limit its losses for now. The economic calendar won't be featuring any data in the remainder of the session.

Technical outlook

The CCI indicator on the daily graph finally broke below the 0 mark, suggesting that the bearish pressure is building up. $1319 (20-DMA) could be seen as the first technical support for the pair ahead of $1300 (psychological level) and $1288 (50-DMA). On the upside, resistances could be encountered at $1335 (daily high), $1350 (Sep. 7 high) and $1357 (Sep. 8 high).