Gold sits near daily tops, just below $1810 level
- A combination of supporting factors assisted gold to regain positive traction on Monday.
- Sustained USD selling remained supportive amid concerns about rising COVID-19 cases.
- The prevalent risk-on mood might turn out to be the only factor capping any strong gains.
Gold built on its steady intraday positive move and was last seen trading near the top end of its daily trading range, around the $1807 region.
The precious metal caught some fresh bids on the first day of a new trading week and snapped two consecutive days of modest losses, stalling last week's modest pullback from multi-year tops. The uptick was sponsored by a combination of factors, with bulls shrugging of the prevalent upbeat market mood.
The record increase in COVID-19 cases across the world, coupled with concerns over deteriorating US-China relations extended some support to the precious metal's perceived safe-haven status. It is worth reporting that the US President Donald Trump announced on Friday that there will be no phase-two trade deal with China.
Meanwhile, the US dollar remained depressed through the first half of the trading action on Monday, which provided an additional boost to the dollar-denominated commodity. However, the upside is likely to remain limited amid the risk-on environment, as depicted by a positive tone surrounding the global equity markets.
Despite worries about the second wave of coronavirus infections, investors seemed convinced that the worst of the pandemic was probably over. This, in turn, remained supportive of improving global risk sentiment and might hold bullish traders from placing fresh bets, rather capping any strong gains for the commodity.
Hence, it will be prudent to wait for some strong follow-through buying beyond the $1810 region before positioning for any further appreciating move. The commodity might then surpass the recent swing highs, around the $1818 level, before eventually darting towards the next major hurdle near the $1825-27 region.
Technical levels to watch