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  • Gold wavers around one-week top, recently on the defensive mode.
  • Markets cheer strong US fundamentals, covid updates and stimulus hopes to welcome traders after a long weekend.
  • Full markets’ reaction to the recently upbeat catalysts, China data will be the key in Asia.

Gold eases to $1,728, while trying to reverses late Monday’s pullback from over a week’s top, during the initial Asian session trading on Tuesday. The yellow metal’s rise to the highest since March 26 the previous day while benefiting from the US dollar losses and upbeat market sentiment. However, bulls failed to keep the gains as the drop in the US 10-year Treasury yields and upbeat equities lured traders off from the yellow metal as full markets eyed.

Optimistic markets need more participation”¦

As major markets in Europe and Asia were off on Monday, strong US fundamentals and hopes of economic recovery couldn’t entertain gold buyers.

Among the positives, US activity numbers and jobs report have been the latest fuel to the sentiment whereas chatters over the faster pace of covid vaccinations in the US and the UK add to the upbeat mood. Further, US President Joe Biden’s signals to push his $2.25 trillion infrastructure spending through the Senate, despite Republicans’ readiness to block the bill, offer an extra cheery on the cake. Additionally, the UK’s unlock and faster jabbing in the US and Britain join the league of risk-positive factors.

It should, however, be noted that the jump in the coronavirus (COVID-19) figures in China and India question the yellow metal bulls as those are the world’s largest bullion buyers.

Against this backdrop, the Wall Street benchmarks portrayed a warm welcome to the US traders on Monday but the US 10-year Treasury yield declines 1.6 basis points (bps) to tease the 1.70% threshold.

Looking forward, covid updates and China’s Caixin Services PMI, expected 51.7 versus 51.5 prior, for March should offer immediate direction. However, the global traders’ reaction to the latest risk-on mood will be important to observe.

Technical analysis

Monday’s bearish Doji candlestick on the daily chart below 21-day EMA warrants gold buyers to stay cautious unless providing a clear break of $1,731.