Gold price struggles to capitalize on its intraday bounce and remains below the $2,748-2,750 supply zone through the early part of the European session on Monday. Safe-haven demand stemming from Middle East tensions and US election jitters continues to act as a tailwind for the precious metal.
From a technical perspective, last week's repeated failures to find acceptance or build on momentum beyond the $2,748-2,750 area warrant some caution for bullish traders. Moreover, the recent range-bound price action witnessed over the past week or so points to indecision among traders over the next leg of a directional move. Hence, it will be prudent to wait for a sustained strength beyond the said barrier or a convincing break below the short-term trading range support near the $2,720-2,715 zone, before positioning for a firm near-term trajectory.
Meanwhile, some follow-through buying beyond the $2,748-2,750 region should allow the Gold price to retest the all-time peak, around the $2,658-2,659 area touched earlier this month. The subsequent move up could lift the XAU/USD towards the $2,770 zone, representing a nearly four-month-old ascending trend-line resistance, en route to the $2,800 round-figure mark.
On the flip side, weakness below the $2,720-2,715 region is likely to find decent support near the $2,700 mark, which if broken decisively should pave the way for deeper losses. The gold price might then accelerate the corrective fall towards intermediate support near the $2,675 area and eventually drop to the $2,657-2,655 horizontal support.
Fundamental Overview
Gold price (XAU/USD) struggles to capitalize on its intraday bounce and remains below the $2,748-2,750 supply zone through the early part of the European session on Monday. Safe-haven demand stemming from Middle East tensions and US election jitters continues to act as a tailwind for the precious metal. Apart from this, a modest US Dollar (USD) pullback from its highest level since July 30 turns out to be another factor lending some support to the commodity.
That said, the prospects for smaller rate cuts by the Federal Reserve (Fed) and deficit-spending concerns after the US election remain supportive of elevated US Treasury bond yields. This, along with a generally positive risk tone, keeps a lid on the non-yielding Gold price. Traders also seem reluctant ahead of this week's key US macro data – the Advance Q3 GDP print, the Personal Consumption Expenditures (PCE) Price Index and the Nonfarm Payrolls (NFP) report.