• Gold keeps the bounce off intraday low, stays sluggish during the third consecutive day.
  • Risks cheer vaccine-led optimism, hopes of US stimulus despite fresh lockdown in New Zealand, Australia’s virus woes.
  • Light calendar joins holidays in China and the US to restrict market moves.

Gold picks up bids near $1,823, up 0.08% intraday, during Monday’s Asian session. In doing so, the yellow metal struggles to defy the previous two-day losses amid risk-on mood. However, off in China and the US, as well as the absence of any major data/events, restrict the bullion’s immediate moves.

Market optimism stays intact, but not for the gold…

Although the US dollar weakness and the brighter mood should have helped the precious metal, the global rush towards equities and cryptocurrencies seemed to have negatively affected gold’s latest moves. That said, Wall Street benchmarks refreshed record top on Friday whereas bitcoin also rose to the fresh all-time high during the week.

Market’s underlying bullish sentiment likely follows increasing odds of the US covid relief package as well as successful vaccinations in the developed countries like the UK, the US and China. US President Joe Biden is almost ready with his $1.9 trillion stimulus even as Republicans keep disturbing the road to the much-awaited relief. On the other hand, Britain has so far rolled out 15 million vaccine jabs in the first round and is up for easing the virus-led lockdown. Elsewhere, the US and China have also witnessed receding virus-led numbers amid the jump in vaccinations.

On the contrary, fresh lockdown in New Zealand and Australia, coupled with the World Health Organizations’ (WHO) downbeat statement conveying fears of re-infection of the virus strains, challenge the mood. Also weighing the sentiment could be the geopolitical tension between China and the Western world.

Against this backdrop, S&P 500 Futures rise 0.35% while the US dollar index (DXY) remains depressed around the monthly low.

Considering a light calendar in Asia and off at the key bourses, gold traders may witness a lackluster start to the week. However, bears should remain hopeful if the US dollar witnesses corrective pullback on surprise news. Hence, risk catalysts need attention to forecast the immediate market direction.

Technical analysis

Unless breaking a confluence of 50-day and 200-day SMA, near $1,858-59, gold sellers can keep attacking the monthly support line around $1,814, a break of which will highlight the monthly low surrounding $1,785 for bears.