Gold Futures: Further retracements in the pipeline

Open interest in gold futures markets shrank by around 4.2K contracts at the beginning of the week, reversing at the same time three consecutive daily pullbacks, according to preliminary readings from CME Group. Volume followed suit and dropped for the second session in a row, this time by around 43.4K contracts.

Gold risks a drop below $1,640

Gold prices started the week in a positive tone and extended the rebound from last week’s lows near $1,640 per ounce troy. Monday’s downtick, however, was on the back of shrinking open interest and volume and leaves the door open to a corrective decline in the very near term.