Gold steadies above $1850

Gold begins the trading week with relatively positive performance, up by 0.20%. the Holiday in the US is expected to keep the precious metal’s prices within a tighter range amid a busy US economic calendar week.

An absent US economic docket on Monday keeps gold traders leaning on market sentiment and the economic data revealed in the week ahead. The US economic calendar would feature the US ISM Manufacturing and Non-Manufacturing PMIs, US employment data, led by the Nonfarm Payrolls, and the ADP and JOLTs openings report.

The US Dollar Index is losing traction and aims towards April’s 21 low at 99.818, down 0.24% in the day. Meanwhile, the US 10-year T-note rate remains parked at Friday’s close of 2.743%. Inflation concerns are back, as Germany reported high inflationary readings at all-time-highs, at 8.7% YoY, sparking renewed fears of elevated prices and an aggressive approach of the European Central Bank.

The Gold Index advances during the North American session amid thin liquidity conditions, Stocks and bonds would not trade until Tuesday because of the holiday. The XAU/USD Index reflects decent demand for the non-yielding metal.

Market sentiment has improved since Monday’s Asian open. China reported the fewest coronavirus cases in almost three months. Shanghai and Beijing are preparing for reopening after easing their strict measures, moving to stimulate the economy, which has been hit severely by the Covid-19 zero-tolerance restrictions.

The bright metal has an upward bias, taking advantage of recent US Dollar weakness in the last couple of weeks. Once gold traders reclaimed the 20-day moving average (DMA) last Friday, the XAU/USD fluctuated in the $1840-67 range, unable to break above $1870. Break above the latter would send gold for a re-test of March’s lows at around 1889.91, which also intersects with the bottom Bollinger’s band, followed by $1900.