XAUUSD (1329.02): Gold traded subdued on Monday after price action posted strong declines off the highs near 1346.62 previously. With the support at 1321.27 holding the drops, for now, we expect to see some consolidation taking place. At the same time, as long as the support holds, the bias remains to the upside for a solid retest of the resistance level. On the 4-hour chart, gold prices have posted a modest correction before reversing course again. However, the current price action is looking to show a bearish flag pattern that could be forming. If the support at 1321.27 gives way, this could validate the bearish momentum in gold and signal a move to the downside. The next main support comes at the round number support of 1300 followed by a step to 1280.
