Gold Price Analysis: XAU/USD struggles to hold above $1,750
- Gold rose to its highest level in five weeks above $1,750 on Monday.
- Sour market mood allows precious metal to cling to its gains.
- Wall Street looks to open in the positive territory.
The XAU/USD pair closed the previous week modestly higher and started the new week on a strong footing. After rising to its highest level since May 18th at $1,758 during the early trading hours of the European session, the pair has gone into a consolidation phase and was last seen gaining 0.25% on the day at $1,748.
Gold capitalizes on risk-off flows
Heightened worries over a second coronavirus wave crippling the global economic recovery seem to be weighing on market sentiment on Monday. Sharp upsurge witnessed in the number of confirmed infections in the US and South America is reviving fears over a resurgence of lockdowns.
Reflecting the sour market mood, major European equity indexes are down between 0.2% and 0.8% on the day. Nevertheless, the S&P 500 futures are up 0.7% on the day and if Wall Street opens the day in the positive territory, gold could continue to erase its daily gains.
On the other hand, the greenback is having a difficult time preserving its strength after closing the last four trading days higher against its major peers. With the US Dollar Index staying in the negative territory below 97.50, XAU/USD is likely to remain on track to post daily gains even if the sentiment turns positive during the American session.
The US economic docket will feature the Federal Reserve Bank of Chicago's National Activity Index and Existing Home Sales data on Monday.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
