Fundamental view:

Gold ended in the positive territory this week. Inflation fears, geopolitical tensions helped the safe haven flow thus favoring the precious yellow metal. Fading hopes about Russia and Ukraine reaching a peace agreement, the ongoing coronavirus-related lockdowns in China and inflation fears forced investors to move towards the safe haven gold. President Vladimir Putin has said that diplomatic talks are at a dead-end, as Kyiv has broken the agreement reached in Turkey. Attacks continue, and western nations keep piling up sanctions on Russia.

The US Bureau of Labor Statistics reported that inflation, as measured by the Consumer Price Index (CPI), surged to a new multi-decade high of 8.5% on a yearly basis in March from 7.9% in February. In the same period, the Core CPI edged higher to 6.5% from 6.4%. Moreover, The European Central Bank (ECB) announced that it left its policy settings unchanged after the April policy meeting. The ECB decided to stick to its plan of reducing net asset purchases under the Asset Purchase Programme (APP) to €20 billion in June before concluding the QE in the third quarter. 

The major economic events deciding the movement of the pair in the next week are Building Permits at Apr 19, EIA Crude Oil Stocks Change, Fed Beige Book at Apr 20, Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Fed Chair Powell Speech at Apr 21 and S&P Global Manufacturing PMI at Apr 22 for US. 

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 1.70% higher than the previous week. Maintaining high at 1981.4 and low at 1939.8 showed a movement of 416 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 1991.5 may open a clean path towards 2007.2 and may take a way up to 2033.1. Should 1949.9 prove to be unreliable support, the XAUUSD may sink downwards 1924.0 and 1908.3 respectively. In H4 chart bullish flag pattern formation favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.