Gold Price Forecast: XAUUSD approaches $1,700 as investors eye a slowdown in Fed’s rate hike pace

• Gold price is advancing towards $1,700.00 amid a significant improvement in the risk appetite of investors.
• A robust US payroll data failed to support the DXY as a slowdown in the rate hike pace looks certain.
• Broader markets could turn volatile ahead of US CPI data.

Gold price (XAUUSD) snapped 15-day topsy-turvy moves in a single trading session after gaining more than 3.20% on Friday. The precious metal remained the show-stopper after the market started discounting the fact that the Federal Reserve (Fed) will slow down its pace of hiking interest rates as the terminal rate is merely one bigger rate far from the current borrowing rates.

In the early Tokyo session, the asset is holding its prior week’s gains and the current momentum is expected to approach the psychological resistance of $1,700.00 amid a risk-on market mood. S&P500 settled the week on a positive note as a slowdown in the rate hike extent won’t upset the earnings guidance further.

The US dollar index (DXY) plunged below 111.00 despite the robust US Nonfarm Payrolls (NFP) data. The US economy has added 261k in October vs. the projections of 200k. Going forward, investors will shift their focus toward Thursday’s inflation data. The headline Consumer Price Index (CPI) is seen lower at 8.0% vs. the prior release of 8.2%. While, the core CPI may decline marginally to 6.5%, 10 basis points (bps) lower than the former release.

Gold technical analysis

Gold price has witnessed a stellar buying response after testing the demand zone placed in a narrow range of $1,615.70-1,618.64 on a four-hour scale. The precious metal is auctioning above the 200-period Exponential Moving Average (EMA) at $1,664.20, which adds to the upside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted to the bullish range of 60.00-80.00, which indicates the upside momentum has been triggered.

Gold four-hour chart