- Gold regains positive traction for the second straight session on Monday.
- The risk-off mood, the prevalent USD selling bias remained supportive.
Gold edged higher during the early European session and is currently placed near the top end of its daily trading range, around the $1690 region.
A combination of supporting factors assisted the precious metal to reverse an early dip to the $1672 region and turn positive for the second consecutive session on the first day of a new trading week.
A fresh wave of the global risk-aversion trade – amid persistent worries over the economic fallout from the coronavirus pandemic – continued lending some support to the commodity’s safe-haven status.
The already weaker sentiment deteriorated further after China reported the highest number of new daily cases in nearly six weeks and fueled fears about the second round of COVID-19 outbreak.
The market concerns were evident from the risk-off tone in the global equity markets, which turned out to be a key factor that helped revive demand for traditional safe-haven assets, including gold.
Meanwhile, the US dollar struggled to gain any meaningful traction and remained depressed in the wake of the Fed’s announcement last week to provide additional loans of up to $2.3 trillion.
A broad-based USD weakness provided an additional boost to the dollar-denominated commodity and remained supportive of the intraday positive momentum to over one-month tops.
In the absence of any major market-moving economic releases, developments surrounding the coronavirus saga might play a key role in influencing the momentum and provide some impetus.
Technical levels to watch
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