Fundamental view:

The gold initially fell during the course of the week but later turned around to show signs of strength. The US inflation has extended a helping hand to the yellow metal. The data published by the US Bureau of Labor Statistics revealed on Wednesday that annual inflation, as measured by the Consumer Price Index (CPI), surged to 4.2% in April from 2.6% in March. 

Whereas The US Census Bureau made an announcement on Friday that Retail Sales in April stayed unchanged at $619.9 billion, compared to analysts’ estimate for an increase of 1%. Adding to it, Industrial Production has expanded by 0.7% in April. The University of Michigan’s Consumer Sentiment Index declined to 82.8 in May from 88.3. Despite the uninspiring data, risk flows continued to dominate the financial markets and helped the precious metal – Gold.              

The major economic events deciding the movement of the pair in the next week are Building Permits at May 18, EIA Crude Oil Stocks Change, FOMC Minutes at May 19, Initial Jobless Claims, Philadelphia Fed Manufacturing Index at May 20 and Existing Home Sales at May 21 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.14% higher than the previous week. Maintaining high at 1845.8 and low at 1808.7 showed a movement of 371 pips.

In the upcoming week we expect XAU/USD to show a bullish trend.  The Instrument is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1856.6 may open a clean path towards 1869.8 and may take a way up to 1893.7. Should 1819.5 prove to be unreliable support, the XAUUSD may sink downwards 1795.6 and 1782.4 respectively. In H4 chart symmetrical triangle breakout favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.