Gold remains under heavy selling pressure for the second successive day on Monday and drops to over a one-month low, around the $1,720 area during the early part of the European session. The US dollar hits a fresh two-decade high amid rising bets for more aggressive Fed rate hikes and continues to weigh on the dollar-denominated commodity.

In fact, the markets are pricing in a greater chance of a 75 bps rate increase at the September FOMC meeting. A further rise in the US Treasury bond yields reinforces market expectations, which is seen as another factor driving flows away from the non-yielding yellow metal. That said, the prevalent risk-off environment could offer some support to the safe-haven gold and help limit any further losses, at least for the time being.The Technical Confluence Detector shows that the next relevant support for gold is pegged near the $1,719 area - Pivot Point One Day S2. This is closely followed by $1,714-$1,713 zone - Fibonacci 23.6% One month. A convincing break below will expose the $1,706-$1,705 support - Pivot Point One Week S2 and the $1,700 round-figure mark. Some follow-through selling might make the XAU/USD vulnerable to retesting the YTD low, around the $1,680 region touched in July.

On the flip side, attempted recovery moves might now confront stiff resistance near the $1,728-$1,729 confluence support breakpoint, comprising Previous Week Low and Pivot Point One Day S1. The next relevant hurdle is pegged near the $1,732-$1,733 region - Fibonacci 38.2% One Month. Sustained strength beyond could trigger a short-covering rally towards the $1,737 zone - Fibonacci 23.6% One Week - en route to the $1,741-$1,742 region - Fibonacci 38.2% One Week - and the $1,745 barrier.