Fundamental view:

Gold prices fell this week amid a worsening demand outlook. The China’s lockdown and the geopolitical tension favored the greenback, weighing on the gold. As the Shanghai’s coronavirus lockdown dragged into the fourth week, China ordered mass coronavirus testing in Beijing, escalating fears over a lockdown in the capital city of the world’s second-biggest economy weighed on the yellow metal. Russia’s Foreign Minister Sergei Lavrov said that they rejected Ukraine’s proposal to hold peace talks in Ukraine and warned that they must not underestimate the risks of a nuclear conflict, boosting the dollar even further. Russia’s Foreign Minister Sergei Lavrov said that they rejected Ukraine’s proposal to hold peace talks in Ukraine and warned that they must not underestimate the risks of a nuclear conflict.

Talking about the central bank, The US Federal Reserve has already lifted the main benchmark to a 0.25%-0.50% range and would likely take it to around 2.75% by year-end. Meanwhile CME’s FedWatch tool shows a 96.5% probability of a 50 bps rate hike in May and a 85% chance of a 50 bps June lift-off.             

The major economic events deciding the movement of the pair in the next week are ISM Manufacturing PMI at May 02, JOLTS Job Openings at May 03, ADP Nonfarm Employment Change, ISM Non-Manufacturing PMI, EIA Crude Oil Stocks Change, Fed Interest Rate Decision at May 04 and Nonfarm Payrolls at May 06 US.

XAU/USD Weekly outlook:

Technical View:

 Last week’s high was 3.21% lower than the previous week. Maintaining high at 1934.1 and low at 1871.5 showed a movement of 626 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 1867.0 proves to be unreliable support then the pair may fall further to 1838.0 and 1804.4 respectively whereas a solid breakout above 1929.6 will open a clear path upward to 1963.2 and then will further raise up to 1992.2. In H4 chart bearish shark pattern favors prospects of a bearish trend. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.