Spot gold accelerated lower on Monday, losing around 1% in early US trading, as demand for safe-haven yellow metal was hit by stronger dollar and rising hopes for fast global economic recovery.
Fresh weakness generated strong bearish signal on break of the floor of four-day congestion as bears cracked important support at $1706 (Fibo 61.8% of $1676/$1755), bringing under pressure psychological $1700 level.
Daily close below $1706 would further weaken near-term structure and open way for full retracement of $1676/$1755 corrective phase, capped by the base of thick weekly cloud.
Daily moving averages returned to bearish configuration and 14-4 momentum is breaking into negative territory, adding to negative stance.
Broken congestion floor ($1722) reinforced by 20DMA needs to cap today’s action and keep fresh bears in play.
Res: 1716; 1722; 1725; 1732.
Sup: 1705; 1700; 1695; 1676.
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