Fundamental view:

Gold traded high at the starting of the week but however, with confirmed Omicron cases in Europe and the UK showing mild symptoms, the yellow metal could not standout  and fell against the greenback. The Hawkish comment of the Fed Powell further favored the greenback. While testifying before the US Senate Banking Committee, Powell said it would be appropriate to consider wrapping up the asset taper a few months sooner than initially planned. He also noted that it was time to retire the term transitory when defining inflation in the US. Speaking about the Omicron variant, Powell said that they need to see more data to assess its potential impact on economic activity.

Favorable data also underpinned the dollar bullish trend. The employment in the private sector increased by 534,000. The ISM Manufacturing PMI arrived at 61.1 in November, showing that the business activity in the manufacturing sector continued to expand at a robust pace. Further The US Bureau of Labor Statistics reported on Friday that Nonfarm Payrolls (NFP) increased by 210,000 in November, missing analysts’ estimate of 550,000 by a wide margin. 

The major economic events deciding the movement of the pair in the next week are Nonfarm Productivity quarterly report at Dec 7, EIA Crude Oil Stocks Change at Dec 08, Initial Jobless Claims, WASDE Report at Dec 09, Michigan Consumer Sentiment and Federal Budget Balance at Dec 10 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 2.22% lower than the previous week. Maintaining high at 1808.7 and low at 1761.7 showed a movement of 470 pips.

In the upcoming week we expect XAU/USD to show a bearish trend.  The Instrument is trading below the 200 Simple Moving Average and the MACD trades to the downside. Should 1760.0 proves to be unreliable support then the pair may fall further to 1737.4 and 1713.0 respectively whereas a solid breakout above 1807.0 will open a clear path upward to 1831.4 and then will further raise up to 1854.0. In H4 chart bearish flag pattern favors prospects of a bearish trend. Also to be noted shooting star formation exerts the expectation of downtrend for the pair.