Gold Price Analysis: XAU/USD moves back above $1970 level, closer to session tops
- Sustained USD selling bias extended some support to the dollar-denominated commodity.
- A turnaround in the risk sentiment provided a modest lift to the safe-haven precious metal.
- The uptick lacked any strong follow-through, warranting some caution for bullish traders.
Gold reversed an intraday dip to the $1954 area and might now be headed back towards the top end of its daily trading range.
The selling bias around the US dollar remained unabated on the first day of a new trading week. This, in turn, was seen as a key factor that extended some support to the dollar-denominated commodity and helped limit the early downtick.
The early optimism over better-than-expected Chinese PMI prints for August faded rather quickly. This was evident from a sharp turnaround in the global risk sentiment, which further underpinned the precious metal's safe-haven status.
The anti-risk flow was reinforced by a modest intraday pullback in the US Treasury bond yields. This comes on the back of the Fed Chair Jerome Powell's dovish comments last week and further benefitted the non-yielding yellow metal.
Despite the supporting factors, the uptick lacked any strong follow-through and warrants some caution for bullish traders. This makes it prudent to wait for a sustained strength beyond the $1976-77 supply zone before positioning for any further positive move.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
