Gold clings to gains above $1700 mark amid weaker risk sentiment

The risk-off mood assisted the safe-haven commodity to gain some traction on Monday.
Resurgent USD demand seemed to be the only factor capping the upside for the metal.

Haresh Menghani FXStreet

Gold edged higher during the early European session on Monday and is currently placed near the top end of its daily trading range, around the $1705-06 region.

The safe-haven commodity built on the previous session's goodish intraday bounce from the $1670 level and gained some follow-through traction for the second consecutive session on Monday amid the prevalent risk-off mood.

A US-China spat over the origin of the coronavirus overshadowed the recent optimism about the re-opening of economies in some parts of the world and led to a further deterioration in the global risk sentiment.

Diminishing investors' appetite for perceived riskier assets was evident from a weaker tone around the global equity markets, which eventually provided a goodish lift to traditional safe-haven assets, including gold.

The latest development comes amid persistent uncertainty over the severity of the economic damage caused by the coronavirus-induced lockdowns, which benefitted the US dollar's status as the global reserve currency.

Resurgent USD demand, to some extent, negated the positive factor and seemed to be the only factor that might keep a lid on any strong follow-through gain for the dollar-denominated commodity, at least for the time being.

Hence, it will be prudent to wait for a sustained buying before traders start positioning for any further near-term appreciating move amid absent relevant market-moving US economic releases on the first day of a new week.

Technical levels to watch

XAU/USD

Overview
Today last price	1700.21
Today Daily Change	0.00
Today Daily Change %	0.00
Today daily open	1700.21

Trends
Daily SMA20	1694.54
Daily SMA50	1638.3
Daily SMA100	1592.94
Daily SMA200	1541.06

Levels
Previous Daily High	1705.82
Previous Daily Low	1670.72
Previous Weekly High	1728.71
Previous Weekly Low	1670.72
Previous Monthly High	1747.82
Previous Monthly Low	1568.46
Daily Fibonacci 38.2%	1692.41
Daily Fibonacci 61.8%	1684.13
Daily Pivot Point S1	1678.68
Daily Pivot Point S2	1657.15
Daily Pivot Point S3	1643.58
Daily Pivot Point R1	1713.78
Daily Pivot Point R2	1727.35
Daily Pivot Point R3	1748.88

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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