- Gold struggled to capitalize on its early uptick amid a goodish pickup in the USD demand.
- The downside seems limited on the back of concerns about the global economic recovery.
Gold refreshed daily lows, around the $1927-26 region during the early European session, albeit lacked any strong follow-through selling.
The precious metal failed to capitalize on its early uptick, instead met with some fresh supply near the $1941-42 region and was being pressured by a strong pickup in the US dollar demand. As investors looked past Friday’s mixed US monthly jobs report, the greenback was back in demand on the first day of a new trading week. This, in turn, was seen as one of the key factors weighing on the dollar-denominated commodity.
However, concerns about the global economic recovery, amid the ever-increasing COVID-19 cases extended some support to the precious metal’s safe-haven status. Moreover, holiday-thinned liquidity conditions might further hold investors from placing any aggressive bets and might help limit any deeper losses, at least for the time being.
From a technical perspective, the commodity on Friday slipped below a near three-month-old ascending trend-line support but managed to find some support ahead of the $1900 mark. The subsequent range-bound price action warrants some caution for bearish traders and before positioning for any further near-term depreciating move.
A convincing break below the mentioned $1900 level should pave the way for a slide towards August monthly swing lows support near the $1863-62 region. The US markets are closed on Monday in observance of Labor Day. Hence, the USD price dynamics might continue to act as an exclusive driver of the commodity’s intraday momentum.