Gold (XAU/USD) picks up bids to renew its intraday high around $1,815, extending Friday’s three-month low U-turn. The recent rise in the metal’s price could be attributed to a weaker USD and cautious optimism in the market during Monday’s quiet Asian session. Nonetheless, the US Dollar Index (DXY) remains under pressure near 104.50 after reversing from a 20-year high. As a result, the greenback gauge justifies the US Michigan Consumer Sentiment Index’s downbeat print for May, supported by Fed Chair Jerome Powell’s repeated 50 basis point rate hikes concerns.

Elsewhere, hopes of slowing the virus’s spread in China spread optimism throughout Asia, as the latest Reuters Covid update suggests softer numbers from Shanghai. “On May 15, Shanghai, China’s financial hub, reported 869 new local asymptomatic coronavirus cases, down from 1,203 the day before.” “Data released on Monday showed that confirmed symptomatic cases fell to 69 from 166 the previous day.”

On the contrary, worsening geopolitical concerns in Ukraine weigh on sentiment, as is the European Union’s (EU) plan for additional sanctions against Russia. However, broad concerns about future inflation and economic growth, primarily due to the Covid resurgence in China and the Russia-Ukraine squabble and tighter monetary policies, are also weighing on the mood.

Among these bets, the S&P 500 Futures post minor gains after Wall Street benchmarks rallied the day before. Furthermore, US 10-year Treasury yields extended Friday’s recovery moves, rising 1.5 basis points (bps) to around 2.95 percent at publication.

Investors will look for more evidence to confirm the global economic challenges associated with inflation, which highlights this week’s US Retail Sales data for April. Meanwhile, the aforementioned qualitative catalysts may entice GOLD buyers.

Gold Technical Outlook

Despite a rebound from the lowest levels since February due to oversold RSI conditions, the precious metal remains below the previous key support line from August 2021, which was around $1,830. A confluence of the 200-DMA and the 61.8 percent Fibonacci retracement of August 2021 to March 2022 upside, around $1,835, also poses a challenge to the recovery moves.

In the longer run, the yellow metal gold price is showing negative trades to resume the expected bearish trend for today, to keep the bearish trend scenario active as long as the 1850.00 level remains intact, supported by the negative pressure formed by the EMA50, reminding you that the next main target is 1780.25.

Today’s trading range is expected to be between 1800.00 support and 1840.00 resistance. Good luck!