Fundamental view:

Gold traded low against the greenback during the course of the week. At the start of the week, concerns over the Evergrande crisis turned into a global turmoil. Evergrande, was at risk of default, which could result in a disruption of the entire country’s financial system. People’s Bank of China announced that it left the 1-year and 5-year LPRs at 3.85% and 4.65%, respectively, as expected. On the other hand, The FOMC left the benchmark interest rate, the target range for federal funds, unchanged at 0%-0.25% as widely expected following the September policy meeting.

The updated Summary of Projections of FOMC revealed that the number of policymakers who see a rate hike in 2022 rose to 9 from 7 in June. FOMC Chairman Jerome Powell clarified that the language in the statement meant to taper could be met as soon as the next meeting. Additionally, Powell said that they are planning to conclude the taper around mid-year 2022. This has helped the greenback.              

The major economic events deciding the movement of the pair in the next week Core Durable Goods Orders monthly report at Sep 27, CB Consumer Confidence Index at Sep 28, EIA Crude Oil Stocks Change, Fed Chair Powell Speech at Sep 29, GDP quarterly report, Initial Jobless Claims at Sep 30, ISM Manufacturing PMI at Oct 01 for US.

XAU/USD Weekly outlook:

Technical View:

 Last week’s high was 1.18% lower than the previous week. Maintaining high at 1787.2 and low at 1737.9 showed a movement of 493 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 1728.6 may open a clean path towards 1708.6 and may take a way down to 1679.3. Should 1777.9 prove to be unreliable resistance, the XAUUSD may raise upwards 1807.2 and 1827.2 respectively. In H4 chart inverted cup and handle pattern formation favors prospects of a bearish trend. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.