Gold Price Forecast: XAUUSD dangerously close to the year’s low

XAUUSD Current price: $1,628.80

• US government bond yields soared as the US central bank stays on the aggressive path.
• A tepid US Services PMI, down to 54.4 in October, halted the post-Fed dollar’s rally.
• XAUUSD flirted with the yearly low before bouncing, bears retain control.

Spot gold flirted with the 2022 low of $1,614.81 during the European morning, falling to $1,616.52 a troy ounce as the dollar retained its post-Fed strength. Demand for the American currency cooled a bit following the US opening and mixed US data. It seems that Wall Street finished digesting the Federal Reserve monetary policy meeting outcome, with major indexes trimming most of their pre-opening losses.

US Treasury yields, in the meantime, soared. The yield on the 2-year Treasury note peaked at 4.745%, its highest since 2007, while that on the 10-year note hit an intraday high of 4.22% after Chair Jerome Powell noted any discussion on rate hikes pausing would be premature. Higher yields boosted the greenback, although a tepid US ISM Services PMI reading halted the rally. The index printed at 54.4 in October, below the previous 56.7.

XAUUSD price short-term technical outlook

XAUUSD has stabilized in the $1,620 price zone. Technical readings in the daily chart maintain the risk skewed to the downside as gold develops below bearish moving averages, down for a second consecutive day. At the same time, the Momentum indicator remains flat within neutral levels, while the RSI indicator resumed its decline and heads south at around 39.

In the 4-hour chart, chances are also of a bearish continuation. The 20 SMA has accelerated its decline below the longer ones, which also retain downward slopes. Technical indicators have stabilized well into negative territory, with the RSI bouncing modestly from oversold readings.

Support levels: 1,614.80 1,603.20 1,591.90

Resistance levels: 1,632.00 1,645.20 1,657.90

View Live Chart for XAUUSD