Gold Extends Decline, Market Prepares for Fed Interest Rate Call

Spot gold continues its downward slide on Monday, dropping below the $2,000 threshold and easing into the nearby range of $1,980 as the market gears up for new inflation data with the US Consumer Price Index on Tuesday. XAU/USD has seen sharp declines for two consecutive days, signaling potential for an extended downtrend. Technical indicators on the daily chart reflect strong selling pressure as the pair breaks below the 20-day Simple Moving Average (SMA), maintaining a downward slope. Longer-term SMAs lack upward momentum, setting target levels around $1,930 to $1,950. Finally, technical indicators are descending into negative territory, aligning with lower lows.

Looking ahead and on the 4-hour chart, risks lean towards the downside. XAU/USD accelerates its decline after breaking below the flat 200-period SMA, while the 20-period SMA crosses below the 100-period SMA from above—a sign of increased selling pressure. Meanwhile, technical indicators are heading south around oversold levels without showing signs of divergence. Gold hit a low of $1,976.26 on November 20, a breaking point confirming the continuation of the downward trend in the upcoming trading sessions.

Support levels: $1,976.26, $1,959.40, $1,946.00

Resistance levels: $1,994.40, $2,001.70, $2,014.20