Fundamental view:

Gold markets have pulled back a bit during the trading week, only to show signs of strength again just above the $1900 level. As the US dollar is trying to recover we expect the instrument to be bearish in the upcoming week.

Analysts note that rising inflation pressures continue to put pressure on real yields, which is a positive environment for gold; however, on the other side, some analysts have said that in the near-term, investors need to pay attention to strength in the U.S. dollar index.

The major economic events deciding the movement of the pair in the next week are Core Retail Sales monthly report, FOMC Economic Projections, Retail Sales monthly report at Sep 16, Unemployment Claims at Sep 17, Prelim UoM Consumer Sentiment, and CB Leading Index monthly report at Sep 18 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 1.30% lower than the previous week. Maintaining high at 1966.5 and low at 1906.5 showed a movement of 600 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. A solid breakout below 1909.4 may open a clean path towards 1877.9 and may take a way down to 1849.4. Should 1969.4 prove to be unreliable resistance, the XAUUSD may raise upwards 1997.9 and 2029.4 respectively. In H4 chart bearish butterfly pattern favors prospects of a bearish trend. Also to be noted bearish shooting star formation exerts the expectation of downtrend for the pair.