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  • Gold struggles to trim Friday’s losses despite bouncing off $1,897.32.
  • Risk sentiment recovers amid updates that US President Donald Trump’s health is recovering from the virus.
  • S&P 500 Futures print mild gains but other risk catalysts trade mixed.
  • Risk catalysts are the key amid a light calendar in Asia, off in China.

Gold prices fade the day-start uptick to $1,904.66 while declining to $1,900 amid the early Asian session on Monday. Even so, the bullion flashes 0.13% intraday gains after stepping back from a nearly two-week high on Friday. The metal has been under pressure following the news of US President Donald Trump’s coronavirus (COVID-19) infection broke. Although the latest positive updates from the US have helped S&P 500 Futures to kick-start the week on the positive side, gold buyers await fresh clues amid macro uncertainty.

Virus-led risks remain on the table…

Although US President Donald Trump’s latest tweet, followed by a short drive outside Walter Reed, offered initial optimism to the American stock futures, the market remains worried as virus woes gain momentum in the UK and Europe. The Guardian shares a leaked government document to highlight possibilities of a three-tier lockdown in England whereas Ireland, France and New York are also flashing signs of harsh activity restrictions.

Concerns about Brexit have been positive after UK PM Boris Johnson and EU Commission President Ursula von der Leyen met and approved a further month of talks during the weekend despite “significant gaps” in the last scheduled round of negotiations. Furthermore, US stimulus hopes are on the rise as House Speaker Nancy Pelosi and the House Majority Leader Mitch McConnell are both optimistic about the much-awaited aid package. Also increasing the odds are recent updates suggesting that US President Trump and Treasury Secretary Steve Mnuchin talked over the phone call and discussed efforts to get progress on economic stimulus.

Against this backdrop, S&P 500 Futures print 0.30% gains to 3,354.38 whereas other risk barometers like AUD/USD and USD/JPY remain mostly mixed. While AUD/USD takes rounds to 0.7160, USD/JPY takes the bids to 105.53 by the time of the press.

Although the golden week holidays in China and regional off in Australia, coupled with Asia’s light calendar, may restrict the market moves, updates concerning US President Donald Trump’s health will be the key to watch for near-term trade direction.

Technical analysis

Friday’s spinning top on the daily chart suggests traders’ indecision but 21-day SMA, at $1,914.44 now, restricts gold’s short-term upside momentum. Though, September 24 top near $1,877 and 100-day SMA around $1,857 are the key supports to watch during the yellow metal’s further declines.