Gold Price Analysis: XAU/USD eases from multi-week tops, still comfortable above $1950 level

Gold trimmed a part of its early gains to the highest level since mid-September, albeit has still managed to hold in the positive territory. The commodity was last seen trading just above the $1955 level, up 0.30% for the day.

The US dollar remained depressed on the back of the Democratic candidate Joe Biden's victory in a nail-biting US Presidential election. A weaker greenback was seen as one of the key factors that benefitted dollar-denominated commodities, including gold.

Meanwhile, the possibility of a split congress fueled speculations that the Fed will have to ease further to support the economy amid the near-term risk of rising COVID-19 infection. This, in turn, provided an additional boost to the non-yielding yellow metal.

However, the upbeat market mood – as depicted by a strong rally in the equity markets – undermined demand for traditional safe-haven assets. The prevalent risk-on environment held bulls from placing fresh bets and kept a lid on any further gains for the precious metal.

That said, the near-term bias still seems tilted firmly in favour of bullish traders and supports prospects for additional gains. Hence, any meaningful dip should be seen as a buying opportunity, which should help limit the downside for the XAU/USD, at least for now.

There isn't any major market-moving economic data due for release from the US on Monday. Hence, the USD price dynamics, along with the broader market risk sentiment, will play a key role in influencing the intraday movement and assist traders to grab some short-term opportunities.

Technical levels to watch