Fundamental view:

This week the gold price had been climbing. This week the PMI numbers also impressed, on Monday the ISM Manufacturing PMI for July came in at 54.2 vs expectations of 53.6. Then later on in the week, ISM Non-Manufacturing PMI for the same month beat consensus estimates of 55.0 and hit 58.1. Obviously things are not so rosy in the US overall as the COVID-19 pandemic is still not under control. US President Trump’s answer seems to be a vaccine rather than more lockdowns as he stated one may be available by 3rd November. This is coincidently the same date as the US election. 

We expect the gold to pullback in the upcoming week. By pulling back, it shows signs of exhaustion that clearly is a bit overdue.

The major economic events deciding the movement of the pair in the next week are Core PPI monthly report at Aug 11, Crude Oil Inventories, Core CPI monthly report at Aug 12, Unemployment Claims at Aug 13, Core Retail Sales monthly report at Aug 14 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 4.47% higher than the previous week. Maintaining high at 2072.7 and low at 1960.5 showed a movement of 1122 pips.

In the upcoming week we expect XAU/USD to show a bearish trend.  The Instrument is trading is trading above the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1970.8 may open a clean path towards 1909.5 and may take a way down to 1858.6. Should 2083 prove to be unreliable resistance, the XAU/USD may raise upwards 2134 and 2195.2 respectively. In H4 chart breakout of a rectangle pattern favors prospects of a bearish trend. Also to be noted bearish spinning top formation exerts the expectation of downtrend for the pair.