Gold prices fell 1 percent to a three-week low on Monday, pressured by rising U.S. stocks and an agreement that averted a U.S. government shutdown, dampening demand for non-interest paying bullion. Many financial markets in Asia and Europe were closed for the May Day holiday, resulting lower liquidity. U.S. Congressional negotiators hammered out a bipartisan agreement on a spending package to keep the federal government funded through Sept. 30, averting a government shutdown. Spot gold was down to an almost one-month low of $1,256.28 an ounce. The market was waiting for the Federal Reserve's two-day policy meeting. Any changes in the Fed’s statement could cause volatility in gold prices.
On technical front, gold pulled back in major technical indicators with support at the 200-day moving average of $1,252.87 and the 50-day moving average of $1,250. The resistance can be found at the key mark of $1,300. Prices are expected to remain rangebound. Investors are recommended to cut their positions ahead of Fed’s statement on interest rates, which could trigger a new trend in near term.
Spot silver extended its losing streak to the 11th consecutive day on Monday, down 1.9 percent to $16.87 an ounce, after falling to $16.78, matching the May 10 session low. The MACD and momentum index still showed a bearish tone. A technical rebound can be expected in near term after recent sharp losses. The support and resistance can be found at $16.60 and the 100-day moving average of $17.388 respectively.

 
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