Gold remains confined in a narrow range around $1620 level

Gold extended its sideways consolidative price action and remained confined in a four-day-old trading range through the early European session on Monday.

A combination of diverging forces failed to provide any meaningful impetus or assist the commodity to build on last week's strong gains and led to a subdued/range-bound price action for the fourth consecutive session on Monday.

A goodish pickup in the US dollar demand – supported by the latest optimism over a massive $2.2 trillion US economic stimulus package – was seen as one of the key factors that kept a lid on any further gains for the dollar-denominated commodity.

Meanwhile, the downside remained cushioned amid mounting fears over the economic fallout from the coronavirus pandemic/imminent global recession, which continued lending some support to the precious metal's perceived safe-haven status.

This coupled with the fact that the United States has the highest number of new coronavirus cases in the world and a prolonged period of uncertainty in the wake of tightening coronavirus lockdowns across the world might further help limit the downside.

However, it will be prudent to wait for a sustained break through the near-term trading range before traders start positioning for the commodity's next leg of a directional move amid absent relevant market moving economic releases.

Technical levels to watch