Gold futures settle lower for a second straight session

Gold futures settled lower on Monday for a second straight session, with strength in the US dollar pressuring prices for the precious metal.

The dollar has generally been the primary safe haven in recent weeks, but interest in gold, while perhaps somewhat subdued, is still relatively solid. Investor sentiment has remained positive in the face of continued geopolitical risk.

April gold GCJ22, -1.05% declined by $14.40, or 0.7%, to settle at $1,939.80 an ounce after losing 0.4% on Friday, but gaining more than 1% last week.

the latest trade data shows there is still a lot of bullish sentiment in the marketplace; some traders have said they see strategic opportunities to enter the gold market at lower price levels.

Gold’s net length now stands at 115,132 contracts, down 9% from the previous week. During the survey period, gold prices were capped just below $1,950 an ounce.

It could be a big week for gold prices. The yellow metal came into the month of March surging on fear from the Russian invasion of Ukraine. The war led to a strong spike but gold fell just short of testing the all-time-high that printed in the summer of 2020.

Weekly candle from early-March ended up showing a vigorous reversal off of that failed high, with the weekly bar closing as a gravestone doji.

The following week is what helped to create the evening star however, as that week’s price action retraced even more of that prior breakout, bringing prices back to the point of origination around the 1900 psychological level.

Evening stars are often followed with the aim of bearish reversals and that potential remains as we move into a new week and a new quarter. Given that markets are nearing the end of the month, the monthly bar in Gold is worthy of review as it is highlighting a strong reversal after that failed high.

If the monthly bar ends up closing in the red, this will look much more attractive for bigger picture reversal scenarios going into the second quarter of this year.