XAU/USD closes below downtrend, outlook worsens

XAU/USD closed below the long-term downward-sloping line on Monday, even though the bullion showed some signs of a recovery after a slump that took place earlier in the beginning of the day. In case gold fails to return above 1,107 in the next 24 hours, the metal's outlook will deteriorate significantly. The only weekly or monthly support is currently represented by the weekly S3 at 1,088. This level is followed only by the 2010 low at 1,044. Moreover, any confident rebound will be extremely difficult to organise in the short-term amid a dense cluster of resistances around 1,110. 

Sentiment of the SWFX market with respect to the yellow metal remains strongly positive at the moment, as bulls are enjoying a majority of 71% of all open positions, while bears are keeping only 29% of them.