Gold refreshes session tops near $1911-12 region; upside seems limited

A softer tone surrounding the USD assisted gold to regain positive traction on Monday.
The risk-on mood, a pickup in the US bond yields might keep a lid on any strong gains.
Bulls might wait for a sustained move beyond a two-month-old descending trend-line.

Haresh Menghani FXStreet

Gold edged higher through the early European session on Monday and was last seen hovering near the top end of its daily trading range, around the $1910-11 region.

The precious metal managed to regain positive traction on the first day of a new week and has now reversed the previous day's negative move. A mildly softer tone surrounding the US dollar was seen as one of the key factors that extended some support to the dollar-denominated commodity.

This comes on the back of an uncertain US political situation, which further benefitted the precious metal's perceived safe-haven status. However, a combination of factors might keep a lid on any runaway rally for the XAU/USD, warranting some caution before placing aggressive bullish bets.

A strong pickup in the US Treasury bond yields might help limit any meaningful downside for the greenback. Adding to this, concerns about the second wave of coronavirus infections and renewed lockdown measures might continue to benefit the USD's status as the global reserve currency.

Apart from this, the prevalent risk-on mood – amid reviving hopes for additional US fiscal stimulus measures – might further collaborate towards capping gains for the non-yielding yellow metal.

Even from a technical perspective, the XAU/USD has repeatedly failed near a resistance marked by a two-month-old descending trend-line. Hence, any subsequent move up runs the risk of fizzling out rather quickly amid absent relevant market-moving economic releases from the US.

Meanwhile, the Fed Chair Jerome Powell's scheduled speech might influence the intraday momentum and assist traders to grab some meaningful opportunities later during the early North American session.

Technical levels to watch

XAU/USD

Overview
Today last price	1911.16
Today Daily Change	10.46
Today Daily Change %	0.55
Today daily open	1900.7

Trends
Daily SMA20	1895.11
Daily SMA50	1927.33
Daily SMA100	1871.63
Daily SMA200	1753.02

Levels
Previous Daily High	1914.04
Previous Daily Low	1897.86
Previous Weekly High	1933.3
Previous Weekly Low	1882.46
Previous Monthly High	1992.42
Previous Monthly Low	1848.82
Daily Fibonacci 38.2%	1904.04
Daily Fibonacci 61.8%	1907.86
Daily Pivot Point S1	1894.36
Daily Pivot Point S2	1888.02
Daily Pivot Point S3	1878.18
Daily Pivot Point R1	1910.54
Daily Pivot Point R2	1920.38
Daily Pivot Point R3	1926.72

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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