Gold closes lower, losses to be extended on Tuesday

Fears of a US rate hike this year, fuelled by comments from FOMC officials on Monday, resulted in a sharp decline of gold prices. Bears managed to sustain losses Monday evening, when the bullion closed the session above 2014 low at 1,131. However, bearish momentum is being extended on Tuesday. A fall below the 1,125 mark (weekly S1, 38.2% Fibonacci retracement of Aug-Sep downtrend) is highly likely to pave the way down to 1,118 (55-day SMA) in the short term and the 1,100 area in the medium term. On the contrary to that, daily technical studies now project a rebound to take place.

Distribution between bullish and bearish market participants at the SWFX market has become negative for the first time in more than 10 months as the portion of the former slid from 50% to 49% in the past 24 hours.