Gold eases on Monday’s session after an aggressive buying interest in the previous day after the rebound on the one-year low of 1211.38. The precious metal dipped below the 40-simple moving average (SMA) in the 4-hour chart pointing to a continuation of the bearish outlook.

From the technical point of view, the Relative Strength Index (RSI) is sloping to the downside, slightly above the threshold of 50, while the %K line dipped below the %D line in the overbought zone, creating a strong bearish case and suggesting further losses.

If price action remains below the 40-SMA, there is scope to challenge the 20-SMA near 1225.44. A drop below this area would take the price closer to the one-year low (1211.38). Further losses would open the way towards the 1204 support level, taken from the low on July 2017.

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However, if the market extends gains to the upside, the next level to have in mind is the 1238 resistance barrier, identified by the troughs during July 2018. A jump above this area could drive the price until the 23.6% Fibonacci retracement level of the downleg from 1365 to 1211.38, around 1247.58.

Overall, the precious metal has been holding within a significant downward movement since April 11, indicating that the price remains in a bearish mode in the long term.

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