Gold Price Analysis: XAU/USD struggles to capitalize on intraday bounce, up little around $1930-32
- Gold managed to find decent support ahead of the $1800 mark and reversed an intraday dip.
- The prevalent cautious mood, weaker US bond yields extended some support to the metal.
- A goodish pickup in the USD demand kept a lid on any meaningful gains for the commodity.
Gold struggled to capitalize on its goodish intraday bounce of nearly $40 and was last seen trading with modest gains, around the $1830-32 region.
The precious metal witnessed some selling during the early part of the trading action on Monday and dropped to one-and-half-month lows, albeit managed to find decent support ahead of the $1800 mark. The prevalent cautious mood extended some support to traditional safe-haven assets and assisted the XAU/USD to attract some dip-buying.
Friday's disappointing US Retail Sales added to growing market worries about the potential economic fallout from the continuous surge in new COVID-19 cases. The risk-off mood was evident from a weaker trading sentiment around the equity markets and reinforced by sliding US Treasury bond yields, which further benefitted the non-yielding yellow metal.
However, the emergence of some fresh US dollar buying kept a lid on any runaway rally for the dollar-denominated commodity, rather prompted some selling near 50-hour SMA. The mentioned barrier is pegged near the $1840 region, which should now act as a key pivotal point for short-term traders amid absent relevant market moving economic releases from the US.
From a technical perspective, sustained weakness below the very important 200-day SMA might have already set the stage for an extension of the recent downfall. That said, traders might still wait for a sustained weakness below the $1800 mark before confirming the bearish bias and positioning for any further depreciating move for the XAU/USD.
Technical levels to watch