- Gold struggled to capitalize on its intraday gains and faced rejection near the $1900 mark.
- Sustained USD selling bias provided a modest lift to the dollar-denominated commodity.
- The prevalent risk-on environment was seen exerting pressure on the safe-haven metal.
Gold refreshed daily lows during the early European session, albeit quickly recovered thereafter. The commodity was last seen trading with modest daily gains, just below the $1885 level.
The selling bias surrounding the US dollar picked up the pace on the first day of a new trading week after the US President Donald Trump signed a $2.3 trillion COVID-19 relief and government funding bill. This was seen as one of the key factors that provided a modest lift to the dollar-denominated commodity and pushed spot prices to four-day tops.
The uptick, however, lacked any follow-through and faltered near the $1900 round-figure mark. The US stimulus added to the latest Brexit optimism and boosted investors’ confidence. This was evident from a positive trading sentiment around the equity markets, which turned out to be a key factor that capped gains for the safe-haven XAU/USD.
Despite the two-way price moves, the yellow metal remained well within the last week’s broader trading range. This, in turn, warrants some caution for aggressive traders and makes it prudent to wait for a sustained move in either direction before positioning for a firm near-term trajectory amid holiday-thinned liquidity conditions.
There isn’t any major market-moving economic data due for release from the US. Hence, the broader market risk sentiment and the USD price dynamics might continue to play a key role in influencing the XAU/USD. Apart from this, developments surrounding the coronavirus saga might further assist traders to grab some short-term opportunities.
Technical levels to watch
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