Gold Price Analysis: XAU/USD struggles for a firm direction, holds steady above $1900 mark

Gold reversed an intraday dip to three-day lows, albeit lacked any strong follow-through and was seen oscillating in a range, above the $1900 mark through the early European session.

Nervousness ahead of a self-imposed Tuesday deadline to pass the US fiscal stimulus measures kept the US dollar bulls on the defensive, which extended some support to the dollar-denominated commodity. Investors remain unconvinced that the legislation on a wide-ranging coronavirus relief package will be passed. This, along with concerns about the risk of a disputed US election outcome, further benefitted the safe-haven precious metal.

However, a solid bounce in the US equity markets held investors from placing any aggressive bullish bets. The risk-on mood was reinforced by a strong pickup in the US Treasury bond yields, which further collaborated towards capping any meaningful upside for the non-yielding yellow metal. This, in turn, warrants some caution for bullish traders and before positioning for a further intraday appreciating move for the XAU/USD, at least for now.

Even from a technical perspective, the commodity has been oscillating in a range over the past one week or so. This further makes it prudent to wait for a sustained breakthrough the mentioned trading range in order to determine the next leg of a directional move for the commodity.

Market participants now look forward to the US economic docket, featuring the release of Building Permits and Housing Starts. This, along with the broader market risk sentiment, developments surrounding the US fiscal stimulus and coronavirus saga, will influence the XAU/USD and produce some meaningful trading opportunities.

Technical levels to watch