Fundamental view:

Gold traded low and dipped to its lowest level since early November $1778 on Wednesday But showed a rebound on the second half of the week and closed on the negative territory by reaching $1849. The major reason behind the strength of the US dollar was a sharp upsurge in US Treasury bond yields. US President Joe Biden nominated Jerome Powell for a second four-year term as the Fed chair and cemented the view that the Fed could go for a rate hike by June 2022. This also turned to be favorable for the greenback.

Moreover, San Francisco Federal Reserve Bank President Mary Daly said on Wednesday she would be open to accelerating the pace of the central bank’s tapering of asset purchases if inflation remained elevated and jobs growth stayed strong. Daly said “If things continue to do what they’ve been doing, then I would completely support an accelerated pace of tapering.”

On Friday, Traders started shifting their focus to the corona virus headlines. Reports suggested that current vaccines might not be effective against the highly-mutated COVID variant which was detected in South Africa triggered a risk aversion sentiment in the market. Many countries decided to temporarily suspend flights from several African countries and Pfizer said that it will take them around 100 days to produce an adjusted vaccine. This news weighed on the greenback favoring the yellow metal by which it could erase some of its weekly loss.         

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Speech at Nov 29, CB Consumer Confidence Index at Nov 30, ADP Nonfarm Employment Change, ISM Manufacturing PMI, EIA Crude Oil Stocks Change at Dec 01 and Nonfarm Payrolls at Dec 03 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 1.51% lower than the previous week. Maintaining high at 1849.1 and low at 1778.4 showed a movement of 707 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 firm breakout below 1762.8 may make a fall to 1735.2 and then may take a way down to 1692.1. Should 1833.5 prove to be unreliable resistance, the XAUUSD may raise upwards to 1876.6 and 1904.2 respectively. In H4 chart bearish bat pattern favors prospects of a bearish trend. Bearish harami formation further exerts the expectation of downtrend for the pair.