• Gold price fades corrective bounce from intraday low during four-day downtrend.
• Risk profile appears unclear even as Covid news, China data join IMF’s hopes of economic revival.
• Cautious mood ahead of FOMC, sluggish yields and IMF’s fears of inflation seem to weigh on XAU/USD price.

Gold price (XAU/USD) holds lower grounds as sellers attack a short-term key support line near $1,920 heading into Tuesday’s European session. In doing so, the precious metal reverses the mid-Asian session’s corrective bounce off the stated trend line support.

The reason for the metal’s weakness could be linked to the mixed details of the International Monetary Fund (IMF) updates as the global lender cited inflation fears while showing hopes of economic recovery. On the same line could be the recent action from the Bank of Japan (BoJ) to defend the Yield Curve Control (YCC), which in turn puts a floor under the global yields and weigh on the Gold price.

Additionally, Monday’s upbeat US data and hopes that the Federal Reserve (Fed) will do anything to defend its hawkish monetary policy moves also seem to exert downside pressure on the XAU/USD price.

It’s worth noting that the likely end of the Covid-led activity restrictions in the US from May 11 and upbeat China PMIs previously triggered the XAU/USD rebound from the $1,920 support.

While portraying the mood, the US 10-year Treasury yields struggle to extend a three-day uptrend near 3.54% while the US Dollar Index (DXY) retreats to 102.20 at the latest. Further, the S&P 500 Futures remain mildly offered and so do stocks in the Asia-Pacific region.

Looking forward, the second-tier US data relating to sentiment and employment cost may entertain Gold traders but major attention will be given to the US Federal Reserve’s (Fed) monetary policy meeting.