Gold prices (XAU/USD) have opened the week in the same bearish tone seen at the end of the previous one. Friday’s upbeat US Nonfarm Payrolls (NFP) report, dampened investors’ hopes of Federal Reserve (Fed) cuts in early 2024, giving a fresh boost to US yields, to the detriment of the yieldless precious metal. Bullion remains depressed below the $2,000 psychological level in the European trading session with traders in a cautious mood, awaiting US inflation data on Tuesday and the outcome of the Fed’s monetary policy meeting due on Wednesday. Investors’ sentiment is frail on Monday following the downbeat consumer inflation data from China over the weekend. The country’s CPI has shown its lowest growth in the last three years, reviving concerns that the uncertain situation in the world’s second-largest economy may bring global growth lower next year. Beyond that, the escalating tensions in the Middle East are contributing to weigh on risk appetite, as we head into a week packed with central banks’ decisions, starting with the Federal Reserve, on Wednesday.

The technical picture shows Gold prices under increasing bearish pressure after breaching the $2,000 psychological level. The pair has breached below the 50 and 100 SMAs in 4-hour charts and is now pushing against the 200 SMA. Further downtrend will push the precious metal towards a key support area at $1,982, where the 50% Fibonacci retracement of the October – December rally meets the neckline of a Head and Shoulders (H&S) pattern. This is a common figure for trend shifts. A clear break of the neckline level would put bears in control, aiming for mid-November lows, at $1,934 ahead of $1,838 and the measured target of the H&S pattern at $1,851. On the upside, above $2,000, the pair would meet resistance at $2,020 previous support, and $2.040.