XAU / USD with modest losses around the $ 1,850 region

• Gold remains under pressure for the third day in a row on Monday.
• Market optimism is considered a key factor that exerts some pressure.
• A weaker USD offers some support to the precious metal and helps limit losses.

The price of oro moves with a slight negative bias at the start of the European session on Monday, staying close to daily lows around the region of $ 1,850.

The precious metal has struggled to capitalize on the previous day’s rebound from the $ 1,837 region and has found some selling on the first day of a new trading week. The drop marks the third consecutive day of negative movement and is due to underlying bullish sentiment in equity markets, which tends to weigh on demand for the safe-haven XAU / USD.

Despite growing market concerns about the possible economic consequences of the increase in the number of COVID-19 cases, Hopes for financial aid in the United States have continued to support market optimism. It’s worth remembering that investors have been weighing the prospects of a $ 1.9 trillion fiscal stimulus plan to help jumpstart the US economy under Joe Biden’s presidency.

Meanwhile, the likelihood of more aggressive fiscal spending in 2021, along with the cash flow of risk appetite has driven up US Treasury yields. This has been seen as another factor weighing on the yellow metal. Having said that, a weaker US dollar has offered some support to gold prices, denominated in dollars, and has helped limit the deepest losses, at least for now.

In the absence of major US economic releases, overall market risk sentiment could continue to play the dominant role in the XAU / USD price action. This makes it prudent to wait for some continuation selling before confirming that the recent bounce from near the $ 1,800 level may have already been exhausted.

Technical levels of gold