Fundamental view:

Gold formed a bullish candle against the greenback in the past week. The dramatic shift in monetary policy forecasts, supporting gold prices, comes after the U.S. Labor Department said that only 235,000 jobs were created in August. The data significantly missed expectations as economists were forecasting jobs gains of 720,000. The jobs gains were well below even the most bearish estimates. Whereas In August, layoffs fell to their lowest level in more than 24 years, with the number of Americans filing new demands for unemployment benefits falling last week, claiming that the labor market is charging even as the new Covid-19 pandemic escalates.

This week John Paulson, president and portfolio manager at Paulson & Co and Mark Mobius, founder of Mobius Capital Partners, both made headlines for bullish calls on the precious metal. Monday, in an interview with Bloomberg’s David Rubenstein, Paulson said that he prefers gold over bitcoin and that the precious metal looks attractive in the current inflationary environment. “Gold does very well in times of inflation,” he said. Paulson added that gold can go “parabolic” because it is relatively small compared to the overall financial market. Amidst all these catalysts, Yellow metal showed a bullish trend.              

The major economic events deciding the movement of the pair in the next week are JOLTS Job Openings, FOMC Member Williams Speech at Sep 08, Initial Jobless Claims, EIA Crude Oil Stocks Change at Sep 09 and WASDE Report at Sep 10 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.81% higher than the previous week. Maintaining high at 1833.9 and low at 1801.7 showed a movement of 322 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 1840.2 may open a clean path towards 1853.2 and may take a way up to 1872.4. Should 1808.0 prove to be unreliable support, the XAUUSD may sink downwards 1788.8 and 1775.8 respectively. In H4 chart rectangle pattern breakout favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.