- Gold begins the week with an uptick to $1,857, keeps late Friday’s recovery moves.
- Doubts over US President Biden’s second stimulus, virus variant fears heavy the risks amid a light calendar.
- Vaccine hopes battle with bears although looming activity restrictions weigh the mood.
Gold picks up bids around $1,858, an intraday high of $1,859.03, during the initial Asian session on Monday. The yellow metal marked the heaviest drop in six days on Friday before bouncing off $1,837.40. While hardships for the US coronavirus (COVID-19) aid package joins the covid strain worries to heavy the metal, recent chatters over the stimulus seemed to have favored the buyers.
Risks dwindle amid mixed clues…
Escalating infections of the covid strain outside the epicenter Britain and South Africa challenge global policymakers as the variants are resistant to the vaccines and spreads faster. Recently, New Zealand became the victim of the feared virus after Northland reported one case. To tame the infections, the US is planning to recall the ban on visitors from the UK, Ireland and Brazil whereas France is up for announcing the third lockdown. Further, the virus conditions are worsening in the UK and Japan whereas New Zealand is checking all the venues the 56-year-old lady visited while having the newly developed COVID-19.
It should be noted that the chatters over the bumpy road to US President Joe Biden’s $1.9 trillion stimulus plan also weigh on the risks. However, the recent update from the CNN favored risks with Senator Bernie Sanders’ comments.
Read: US Senator Sanders: Democrats will use reconciliation to pass Covid-19 relief package – CNN
Against this backdrop, S&P 500 Futures prints 0.20% intraday gains while the US 10-year Treasury yields also refrain from extending Friday’s losses.
Given the lack of major data/events, gold traders will keep their eyes on the virus and stimulus headlines for fresh impulse. It should be noted that the US dollar index (DXY) rose for the first time in the previous five days on Friday and hence an extension of the greenback’s recovery could negatively affect gold prices.
Technical analysis
Although an ascending trend line from March, at $1,833 now, offers strong support to gold prices, buyers are less likely to enter unless witnessing a clear break above 21-day SMA, currently around $1,874.
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