- A combination of factors prompted some intraday selling around gold on Monday.
- The upbeat market mood, pickup in the US bond yields kept a lid on the early uptick.
- A modest USD bounce exerted some pressure on the dollar-denominated commodity.
Gold refreshed daily lows, around $1869 region during the mid-European session, albeit quickly recovered a bit thereafter. The commodity was last seen trading just above the $1875 region, down around 0.20% for the day.
The precious metal failed to capitalize on its intraday positive move, instead faced rejection near the $1900 mark amid the prevalent upbeat market mood. The global risk sentiment remained well supported by the latest optimism about a last-minute Brexit deal and relief over a long-awaited US economic stimulus.
The US President Donald Trump signed a $2.3 trillion pandemic aid and spending package on Sunday. The bill restores unemployment benefits to millions of Americans and averted a federal government shutdown. The positive developments boosted investors’ confidence and capped early gains for the safe-haven XAU/USD.
The risk-on environment was reinforced by a goodish pickup in the US Treasury bond yields. This helped ease the intraday US dollar bearish pressure and prompted some selling around the non-yielding yellow metal. Apart from this, a goodish intraday USD rebound exerted some additional pressure on the dollar-denominated commodity.
The downside, however, remained cushioned, at least for the time being, as investors seemed reluctant to place any aggressive bets amid relatively thin trading volumes. This makes it prudent to wait for some strong follow-through selling before positioning for any further depreciating move for the XAU/USD.
Technical levels to watch
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