- Gold was seen oscillating in a range through the early European session on Tuesday.
- A softer USD was seen extending some support to the dollar-denominated commodity.
- The upside seems limited ahead of the first US presidential debate later this Tuesday.
Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session, just below multi-day tops set earlier this Tuesday.
The precious metal built on the previous day’s goodish rebound from 100-day SMA support, around the $1849 region, and gained some traction during the early part of the trading action on Tuesday. A mildly softer US dollar was seen as one of the key factors lending some support to the dollar-denominated commodity.
Adding to this, a modest pullback in the US equity futures further underpinned the precious metal’s safe-haven status. The prevalent cautious mood was further reinforced by a fresh leg down in the US Treasury bond yields, which further collaborated towards limiting any meaningful slide for the non-yielding yellow metal.
Meanwhile, the latest optimism over additional US fiscal stimulus measures and upbeat Chinese data released over the weekend capped the upside for the commodity. Investors also seemed reluctant to place any aggressive bets ahead of the first US presidential debate on Tuesday, leading to a subdued/range-bound price action.
In the meantime, the broader market risk sentiment will continue to play a key role in influencing the XAU/USD. Apart from this, Tuesday release of the Conference Board’s US Consumer Confidence Index will also be looked upon for some short-term trading opportunities later during the early North American session.
Meanwhile, the overnight bounce might still be categorized as a short-covering bounce from a technically significant moving average (100-day SMA). Hence, any subsequent move up might still be seen as a selling opportunity and run out of the steam ahead of the $1900 strong horizontal support breakpoint.
Technical levels to watch
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