Gold Price Analysis: Break below $1728 to pave the way for further XAU/USD weakness

Gold witnessed some selling during the early part of the trading action on Monday. The yellow metal is not out of the woods yet, as an ascending trend-line holds the key for XAU/USD bulls.

The upside seems limited as investors seemed reluctant from placing bullish bets ahead of the Fed Chair Jerome Powell's speech in a virtual panel discussion. Powell and Treasury Secretary Janet Yellen will also make their first joint appearance before the US House Financial Services Committee on Tuesday to testify on Fed and Treasury COVID-19 policies.

The lack of any strong follow-through buying beyond the $1740-42 supply zone warrants some caution before positioning for any further appreciating move. This, coupled with the fact that the post-FOMC positive move faltered ahead of the $1760-65 horizontal support-turned-resistance, favours bearish traders.

A sustained break below the trend-line support, currently near the $1728 region will reaffirm the negative bias and pave the way for further weakness. Gold might then turn vulnerable to break through the $1720 intermediate support and accelerate the slide towards the $1700 mark. The downward trajectory could further get extended and drag the metal back towards the multi-month low, around the $1677-76 region touched earlier this month.

Any meaningful upside might continue to confront stiff resistance near the $1760-65 region. A convincing breakthrough might trigger a short-covering move and push the metal further towards reclaiming the $1800 round-figure mark.