Gold Price Analysis: XAU/USD spikes to session tops, around $1960 level

• The heavily offered tone surrounding the USD extended some support to the commodity.
• The prevalent upbeat market mood might keep a lid on any strong gains, at least for now.
• Investors might refrain from placing aggressive bets ahead of the key central bank events.

Gold caught some aggressive bids and shot to fresh daily tops, around the $1958 region during the early North American session.

The bearish pressure surrounding the US dollar picked up pace in the last hour, which, in turn, was seen as one of the key factors that provided a goodish lift to the dollar-denominated commodity. Apart from a broad-based USD weakness, growing expectations about further monetary easing by the Fed further benefitted the non-yielding yellow metal.

This coupled with possibilities of some intraday trading stops being triggered above the $1950 level further contributed to the positive move. However, a strong opening in the US equity markets could undermine the precious metal's safe-haven status and cap the upside, warranting some caution before placing any aggressive bullish bets.

Investors might also be reluctant and prefer to wait on the sidelines ahead of this week's important central bank events – the FOMC on Wednesday, BoJ and BoE on Thursday. This makes it prudent to wait for some follow-through buying before positioning for a further near-term appreciating move towards the $1970-72 horizontal resistance.

Above the mentioned barrier, XAU/USD seems poised to aim back towards reclaiming the key $2000 psychological mark. On the flip side, weakness back below the $1950 region might accelerate the fall towards the $1927 support area before bears eventually drag the commodity back towards challenging a strong support near the $1900 mark.

Technical levels to watch

XAU/USD