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  • A stronger US dollar amid a reversal in Wall Street weighs on gold.
  • XAU/USD having the worst day in a month, eyes on the 20-day SMA.

Gold prices turned sharply lower on Monday during the American session. XAU/USD dropped below $1730/oz and tumbled to $1716, reaching the lowest level in a week.

The move lower took place as equity prices in Wall Street turned negative and following a rally of the US dollar. The greenback was falling across the board but rebounded. The DXY erased daily losses in an hour and rose to 99.50. Tensions between the US and China are keeping stocks under pressure as the first headlines from the National People’s Congress kicks off.

Technical levels

The decline of XAU/USD was capped so far above the 20-day simple moving average that stands at $1714. A consolidation below would likely increase the bearish pressure. The next support stands at $1696. On the upside, now $1730 is the immediate resistance and then $1741.

The main trend in gold remains bullish, but the momentum is fading as it heads for the worst daily slide in a month.