Gold rises to daily highs near $ 1,911-12 region; the climb seems limited

• A softer tone around the USD helps gold regain positive traction on Monday.
• Risk appetite sentiment and a rally in US bond yields could limit strong gains.
• The bulls could expect a sustained move above a two-month downtrend line.

The gold has moved higher at the start of the European session on Monday, rising near the upper end of its five-day range around the $ 1,911-12 region.

The precious metal has managed to regain positive traction on the first day of a new week and has now reversed the negative movement of the previous day. A slightly softer tone around the US dollar it has been seen as one of the key factors that has offered some support to gold prices, denominated in dollars.

This is due to a Uncertain political situation in the US, which has further benefited the perception of the safe haven precious metal. However, a combination of factors could limit any uncontrolled bullish movement of the XAU / USD, which warrants some caution before opening aggressive bull positions.

A strong rally in US Treasury yields could help limit any significant declines for the USD. Added to this, concerns about the second wave of coronavirus and renewed lockdown measures could continue to benefit the USD as a global reserve currency.

Aside from this, the prevailing sentiment of appetite for risk, amid revived hopes for additional measures of fiscal stimulus in the United States, could help further to limit the gains of the yellow metal.

Even from a technical perspective, XAU / USD has repeatedly failed near resistance marked by a two-month downtrend line. Therefore, any subsequent upward movement risks fading rather quickly amid the absence of relevant US economic releases.

Meanwhile, Fed Chairman Jerome Powell’s scheduled speech could sway intraday momentum and help traders seize some significant opportunities at the start of the American session.