- Gold managed to gain some positive traction amid some renewed USD selling bias.
- The risk-on mood might hold bulls from placing aggressive bets and cap the upside.
- Investors might prefer to wait on the sidelines ahead of the Jackson Hole Symposium.
Gold built on its steady intraday move up through the mid-European session and was last seen trading near the top end of its daily range, around the $1950 region.
The precious metal attracted some buying interest on the first day of a new trading week and has now recovered around $20 from the daily swing lows near the $1930 region. The uptick was sponsored by the emergence of some fresh selling around the US dollar, which tends to underpin the dollar-denominated commodity.
The deadlock in the US Congress over the latest stimulus measures, along with growing concerns about the US economic recovery kept the USD bulls on the defensive. This coupled with speculations that additional monetary easing may be necessary to keep the US economic growth on the track further benefitted the non-yielding yellow metal.
However, the upbeat market mood – as depicted by a strong rally in the US equity futures – might cap gains for the safe-haven precious metal. Investors might also be reluctant to place any aggressive directional bets ahead of the Fed Chair Jerome Powell’s speech during the Jackson Hole Symposium later this week.
This makes it prudent to wait for some strong follow-through buying beyond 200-hour SMA, around the $1950 area, above which the commodity could accelerate the momentum towards the $1978-80 region. The subsequent positive move should assist bulls to make a fresh attempt to reclaim the key $2000 psychological mark.
In the meantime, the commodity seems more likely to remain confined in a range amid absent relevant market moving economic releases from the US.
Technical levels to watch
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