- Gold witnessed some aggressive selling on the first day of a new trading week.
- The intraday slide took along some short-term trading stops near 200-day SMA.
- The near-term oversold conditions warrant some consolidation or a modest bounce.
Gold extended last week's sharp retracement slide from multi-year tops and witnessed some aggressive selling for the fifth consecutive session on the first day of a new trading week.
A sustained break below the very important 200-day SMA, near the key $1500 psychological mark, was seen as a key trigger for bearish traders and aggravated the selling pressure.
The commodity nosedived to over one-month lows and is currently placed near an important congestion zone, around the $1450 region, tested in November and December 2019.
Meanwhile, technical indicators on short-term charts are already flashing slightly oversold conditions and warrant some caution before positioning for any further depreciating move.
Hence, a near-term consolidation, or a modest recovery to the $1480 region, looks a distinct possibility, albeit might still be seen as an opportunity to initiate some fresh bearish positions.
Meanwhile, a sustained break below the mentioned support might turn the commodity vulnerable and pave the way for an accelerated decline towards the $1400 round-figure mark.
Gold daily chart
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Technical levels to watch
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