Fundamental view:

Gold markets initially tried to rally during the course of the week but then pulled back again as they cannot seem to pick up enough momentum to continue going higher. TD Securities said in a note  that “While the global market is readying for an inflation overshoot, gold is underperforming.” “Institutional outflows continue to weigh on the yellow metal as nominal rates increasingly discount the singular reflation trade’s impact.” The yield on the 10-year Treasury note has hit a two-week high of 1.684 in the last week as bonds started selling off again after a spike this week in U.S. consumer confidence, which hit 14-month highs in April.

Apart from consumer spending, a lot of US economic data, from inflation to homebuilding, house prices and employment, have exceeded forecasts lately, boosting hopes for faster-than-expected recovery from the coronavirus pandemic.              

The major economic events deciding the movement of the pair in the next week are ISM Manufacturing PMI, Fed Chair Powell Speech at May 03, ADP Nonfarm Employment Change, ISM Non-Manufacturing PMI, EIA Crude Oil Stocks Change at May 05, Initial Jobless Claims at May 06, and Nonfarm Payrolls at May 07 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.44% lower than the previous week. Maintaining high at 1790.0 and low at 1756.2 showed a movement of 338 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 1753.2 may open a clean path towards 1737.8 and may take a way down to 1719.5. Should 1787.0 prove to be unreliable resistance, the XAUUSD may raise upwards 1805.3 and 1820.7 respectively. In H4 chart bearish gartley pattern breakout favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.