Gold price resumed the downside on Monday, breaking under $1,990. XAU/USD bottomed at $1,980 reaching the lowest level in a week.

As of writing it is hovering near $1,980 almost $60 from last week’s top. The reversal in gold gained momentum amid a rally of the US Dollar and higher US yields.

Expectations that the Federal Reserve will raise interest rates again in May pushed yields to the upside. The US 10-year yield rose to 3.60%, the highest level since late March. The US Dollar Index is advancing for the second day in a row, and is above 102.20.

Data released on Monday in the US showed a sharp rebound in the Empire Manufacturing Index in April to 10.8 from -24.60, surpassing expectations of -18.0. The numbers contribute to the expectations of one more rate hike from the Fed.

On the daily chart, XAU/USD is trading around the 20-period Simple Moving Average at the $1,990 area. If the yellow metal consolidates clearly below, the outlook would point to an extension of the correction. On the contrary, if gold manages to remain above and retakes $2,005 bulls may return. The next resistance is seen around $2,025.