Gold Price Analysis: XAU/USD tests April’s recovery below $1,800 amid a quiet Asian session

Gold holds lower ground around $1,766-67, down 0.08% intraday, amid the initial Asian trading on Monday. The yellow metal posted the heaviest monthly gain of 2021 in April, not to forget snapping a three-month downtrend, despite the latest pullback from the $1,797-98 area. Even so, May begins with the downbeat notion as market players doubt global economic recovery and US stimulus amid a quiet session with off in Japan and China.

May be another good month?

Doubts that the one-jab, for now, policy from the Western governments isn’t enough to stop the coronavirus (COVID-19) seem to have exerted the latest downside pressure on risk barometers like gold and equities. Also on the same side could be the worsening virus conditions in Asia and uneven vaccinations, not to forget vaccine manufacturers’ struggle.

On the different page, lack of acceptance to US President Joe Biden’s stimulus packages, amid tax hike plans, also weigh on the market sentiment. Recently, US Treasury Secretary Janet Yellen said, during an NBC interview, “it would be ‘safest’ to include the means for President Biden's infrastructure plan to fund itself.”

Elsewhere, doubts over the recovery in the US-Iran relations, considering the recent rejection from America to call back major sanctions levied on Tehran, join Saudi-Iran tension to amplify the risk-off mood. Additionally, the West versus China story offers an extra smile to the bears.

Alternatively, recovery in the global economics and recently positive earnings from the key US companies seem to battle the pessimism, for now.

Against this backdrop, S&P 500 Futures print 0.18% intraday gains even as Wall Street marked notable losses on Friday.

Although a lack of data and off in the key markets may trouble gold traders, risk catalysts can entertain gold traders ahead of the key US activity numbers for April.

Read: US Purchasing Managers’ Index April Manufacturing Preview: Let the good times roll

Technical analysis

A confluence of 21-day and 50-day EMA near $1,765–$1,764.50 can keep testing gold sellers while the commodity buyers are less likely to take entries until crossing the 200-day EMA level of $1,792.