Fundamental view:

Gold traded high against the greenback and reached to a 2 month high of $1843 during the trading course of the week. The yellow metal remains supported by soaring inflation globally and due to negative real returns. Meanwhile, escalating geopolitical tensions surround US, Russia and Ukraine also make the traders to turn towards the safe haven – gold. The Fed sentiment-driven yields’ price action and inflation concerns worked as the major catalysts in deciding the move the pair. Elsewhere, Data published by the US Department of Labor on Thursday showed that there were 286,000 initial claims which is the highest reading since the month of October for unemployment benefits in the US last week which puts pressure on the US dollar and weighs on the market sentiment.

On Next week Wednesday, the Fed will announce its policy rate decision and release the Monetary Policy Statement after its two-day meeting. Traders are expecting for clearer hints about upcoming rate hikes. Investors are pricing in a first rate hike for March 2022 and at least three hikes through the year.

The major economic events deciding the movement of the pair in the next week are CB Consumer Confidence Index at Jan 25, EIA Crude Oil Stocks Change, Fed Interest Rate Decision, FOMC Press Conference at Jan 26, GDP quarterly report, Core Durable Goods Orders monthly report, Initial Jobless Claims at Jan 27 and Michigan Consumer Sentiment at Jan 28 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 1.02% higher than the previous week. Maintaining high at 1848.0 and low at 1805.6 showed a movement of 424 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 1853.2 may open a clean path towards 1871.7 and may take a way up to 1895.5. Should 1810.8 prove to be unreliable support, the XAUUSD may sink downwards 1787.0 and 1768.5 respectively. In H4 chart bullish crab pattern favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.