Gold Price Forecast: XAUUSD falls for two-straight days amidst a buoyant US Dollar

• Gold price is at the mercy of further Federal Reserve tightening as the US Dollar extended its gains.
• The US ISM Services index remained at expansionary territory, but it’s decelerating.
• Gold Price Analysis: Remains downward biased, though a triple bottom pattern is forming in the daily chart.

Gold price stumbles following hawkish commentary of the Federal Reserve Chairman Jerome Powell, who said that the “ultimate level of rates would be higher than previously expected,” spurring a jump in US Treasury bond yields, which underpinned the greenback, to the detriment of Gold. Also, data from the United States flashed that business activity continues to expand while the labor market remains tight. At the time of writing, the XAUUSD is trading at $1626, down by more than half a percent.

Hawkish commentary by the Fed lifts the USD and weighs on Gold prices

Sentiment remains downbeat, as shown by US equities falling. The Institute for Supply Management (ISM) reported its Services PMI, which decelerated to 54.4 from 56.7 in September, and below estimates of 55.5. Even though the index remained in expansion territory, it’s decelerating, a signal sought by Fed officials. Earlier, the US Department of Labor reported Initial Jobless Claims for the week ending on October 28 were lower than expected and rose by 217K vs. 220K forecasts, even though the US economy continues to weaken, according to specific economic indicators.

Aside from this, market participants bought the greenback on Federal Reserve’s Chair Jerome Powell’s words, who added that the pace of rate hikes would be slower, starting as soon as December, while acknowledging that the window for a soft landing is possible, but it’s getting narrower.

Powell added that September’s Federal Reserve Open Market Committee (FOMC) projections for the Federal funds rate (FFR) “would be higher than previously expected.” XAUUSD tanked on those remarks, after hitting a fresh four-day high at $1669.28, to $1633.23. It should be noted that the yellow metal is extending its losses on the hangover of the FOMC’s decision.

On Friday, the US economic calendar will reveal employment figures, with the Nonfarm Payrolls  October’s report. Further data shown in the report is eyed, like the Unemployment Rate, and salaries, for signs that could flash signals of weakening in the labor market.

Gold Price Analysis: XAUUSD technical outlook

XAUUSD remains downward biased, as shown by the daily chart, though sellers were unable to crack the year-to-date low at $1614.67, opening the door for a formation of a triple bottom chart pattern. Nevertheless, to confirm the chart pattern, XAUUSD needs to clear $1729.35, which might open the door for a re-test of the 200-day Exponential Moving Average (EMA) at $1761.64.