Gold prices saw increasing selling pressure as the session went on Monday as key outside markets likely drove selling.
Following a key upside reversal on Friday, the gold bulls were not able to build on strength seen to end last week's trading. In fact, today's session was a very poor showing for the gold bulls and may be indicative of additional underlying weakness in the yellow metal.
Earlier in the day, the dollar index was weaker while crude oil was stronger. This scenario is often times considered bullish for gold. As the trading day continued, however, both oil and the dollar saw reversals as the greenback strengthened and oil was moderately sold off. Gold prices dipped along with this development and lost a large amount of Friday's gains.
Many are wondering if a bottom has been reached in gold. Given Friday's upside, chatter of a potential bottom increased. The gold market appears, however, to remain at the mercy of the bears. Gold has recently completed a bearish large descending triangle pattern, and $1000 gold could potentially be seen if the pattern is completed.
The gold market continues to lack any real bullish catalyst as stronger stocks and the notion of higher interest rates take their toll. On the upside, the breakdown level of $1183 remains the near-term key for the bulls. The market must see a solid close, or consecutive closes above this level in order to negate the recent breakdown.