Fundamental view:

Gold has posted loss this week against the greenback. US inflation expectations and Treasury bond yields continue to impact gold’s performance. The data from the US showed on Tuesday that the business activity in the manufacturing sector continued to expand at a strong pace which helped the US dollar. The Automatic Data Processing (ADP) Research Institute announced on Thursday the private sector employment increased by 978,000 in May, surpassing the market expectation of 650,000 by a wide margin also helped the dollar and pressured the yellow metal.

Finally, the US Bureau of Labor Statistics announced on Friday that Nonfarm Payrolls in May rose by 559,000, falling short of analysts’ estimate for an increase of 650,000. Underlying details of the publication revealed that the Unemployment Rate declined to 5.8% from 6.1% in April and the Labor Force Participation Rate was little changed at 61.5%.              

The major economic events deciding the movement of the pair in the next week are JOLTS Job Openings at Jun 08, EIA Crude Oil Stocks Change at Jun 09, Core CPI monthly report, Initial Jobless Claims at Jun 10 and Michigan Consumer Sentiment at Jun11 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.20% higher than the previous week. Maintaining high at 1916.4 and low at 1852.1 showed a movement of 643 pips.

In the upcoming week we expect XAU/USD to show a bearish trend.  The Instrument is trading below the 50 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1856.9 may open a clean path towards 1822.3 and may take a way down to 1792.6. Should 1921.2 prove to be unreliable resistance, the XAUUSD may raise upwards 1950.9 and 1985.5 respectively. In H4 chart head and shoulders pattern favors prospects of a bearish trend. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.