- A combination of factors assisted gold to reverse an early dip to the $1930 region.
- The upbeat market mood held bulls from placing aggressive bets and capped gains.
Gold reversed an early dip to the $1930 region and refreshed daily tops in the last hour, albeit lacked any strong follow-through.
The precious metal failed to capitalize on last week’s goodish bounce from three-week lows and has been oscillating in a narrow band over the past two trading sessions. The prevalent offered tone surrounding the US dollar was seen as one of the key factors lending some support to the dollar-denominated commodity.
The uncertainty over the next round of the US fiscal stimulus measures kept the USD bulls on the defensive through the first half of the action on Monday. This, coupled with a weaker tone surrounding the US Treasury bond yields provided an additional boost to the non-yielding yellow metal and remained supportive of the $20 intraday bounce.
However, the upbeat market mood undermined the commodity’s perceived safe-haven demand and kept a lid on any further gains. The global risk sentiment remained well supported by the optimism over a potential vaccine for the highly contagious coronavirus disease the postponement of the US-China trade deal review, originally scheduled on Saturday.
Apart from this, investors also seemed reluctant to place any aggressive bets ahead of the scheduled release of the latest FOMC meeting minutes on Wednesday. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move amid absent relevant market-moving economic releases on Monday.
Technical levels to watch
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