Fundamental view:

Gold showed an uptrend against the greenback during the trading course of the week. In this week, monthly report published by the US Bureau of Labor Statistics showed that the Consumer Price Index (CPI) rose to 7% on a yearly basis in December, which is the major catalyst for the fall of the US dollar. During this week, Powell said that they would need up to   policy meetings to come up with a plan in order to start reducing the balance sheet. His words lead the US dollar to earse its gains as it was recorded after the December minutes showed that some policymakers saw it appropriate to begin the balance sheet runoff following the first rate hike. He also said that “they could look to shrink the balance sheet maybe later this year.”

Elsewhere, The US Census Bureau reported that Retail Sales in December declined by 1.9% to $626.8 billion. This figure also pressured the US dollar in turn favoring the Yellow metal.              

The major economic events deciding the movement of the pair in the next week are TIC Net Long-Term Transactions at Jan 18, Building Permits at Jan 19, Initial Jobless Claims, EIA Crude Oil Stocks Change at Jan 20 and Baker Hughes US Oil Rig Count at Jan 21 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.14% lower than the previous week. Maintaining high at 1829.1 and low at 1790.3 showed a movement of 388 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 1834.4 may open a clean path towards 1851.1 and may take a way up to 1873.2. Should 1795.6 prove to be unreliable support, the XAUUSD may sink downwards 1773.5 and 1756.8 respectively. In H4 chart ascending scallop pattern favors prospects of a bullish trend. Also to be noted Bullish harami formation exerts the expectation of uptrend for the pair.