Gold refreshed daily tops during the early European session, albeit lacked any strong bullish conviction and remained well below three-week tops set on Friday.
Gold has been on the up of late, however meeting some pretty strong rejection in the 1520s, a barrier much protected by the bears on the way to the grand target.
The precious metal failed to capitalize on its good trading stats positive move on Friday, rather witnessed some selling near the $1520 region amid fading safe-haven demand. This coupled with a late pickup in the US Dollar demand exerted some additional downward pressure on the dollar-denominated Gold.
Meanwhile, expectations that the Fed will cut interest rates further at its upcoming meeting at the end of October (29-30 of October) helped the non-yielding yellow precious metal to regain some positive traction on Monday. However, a combination of negative forces kept a lid on any strong follow-through move up, at least for now.
The Greenback remained well supported by the ongoing recovery in the US Treasury bond yields, while the incoming positive trade-related headlines remained supportive of a generally risk-on mood and continued weighing on the precious metal's perceived safe-haven status.
In the latest development, the US Trade Representative's office said on Friday that the US and China have made progress in trade talks and have come close to finalizing parts of a “phase one” trade deal. The US officials have said they hope to sign a deal in mid-November.
In absence of any major market-moving economic releases from the US, the commodity seems more likely to continue with its subdued/range-bound price action as investors start repositioning for this week's key event risk – the latest FOMC monetary policy update scheduled later this week.
Bears have been testing through the commitments of the bear's influence and trend-line resistance where it met the 1500 level, a psychologically important number that guarded a run towards the 1520 area guarding prospects for a test back to the key 1535 resistance target.
On failures to hold in the 1500s, bears, instead will be looking towards a 50% mean reversion of the late June swing lows to recent highs level around 1460/70.