Gold slid 1.7 percent to a seven-week low around $1,220 on Monday as the dollar recorded its best day in four months, bolstered by higher U.S. bond yields and upbeat manufacturing activity, weighing on appetite for non-interest bearing bullion. After hawkish signals from European Central Bank and Bank of England, firmer U.S. Treasury bond yields dented gold’s appeal as a hedge against risks, adding to weak physical demand in dragging down gold prices. The expected upbeat payroll report due on Friday will keep bullion in check.
On technical front, a long lower shadow line was formed on Monday, suggest subdued support. Support can be found at the May-low at $1,214 an ounce, and is expected to move down further to the key mark of $1,200 if the level is breached.
Silver tracked gold, plunging 3.25 percent. Despite of support at $16, the MACD and momentum index suggest a weak tendency. Silver prices are expected to fall further to $15.8 if the level of $16 is breached.

 
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