- Gold attracted some dip-buying amid renewed concerns about rising US-China tensions.
- US fiscal stimulus hopes, sliding US bond yields extended some support the commodity.
- The USD struggled to reserve its intraday recovery gains and further provided a minor lift.
Gold has managed to recover the early lost ground to three-day lows and was last seen trading just below the $1840 region, nearly unchanged for the day.
The precious metal witnessed some selling through the first half of the trading action on Monday, albeit a modest pullback in the equity markets helped limit the early downtick. The early downtick was exclusively sponsored by a solid intraday US dollar rebound from two-and-half-year lows, which tends to undermine demand for the dollar-denominated commodity.
However, renewed concerns about heightened tensions between the world’s two largest economies took its toll on the global risk sentiment and helped limit the early slide for the safe-haven XAU/USD. Reuters reported that the US was preparing to impose sanctions on at least a dozen Chinese officials over their alleged role in a crackdown on Hong Kong’s pro-democracy movement.
Meanwhile, the USD struggled to preserve its intraday recovery gains amid expectations that US lawmakers will agree to a new coronavirus relief package. This, along with a weaker tone surrounding the US Treasury bond yields extended some additional support, instead attracted some dip-buying around the non-yielding yellow metal and pushed it back closer to daily tops.
In the absence of any major market-moving economic releases from the US, the XAU/USD remains at the mercy of the USD price dynamics. Traders would further take cues from the broader market risk sentiment. Apart from this, the US stimulus headlines might further produce some meaningful trading opportunities around the commodity.
Technical levels to watch
Share
