Fundamental view:

The yellow metal plummeted against the US dollar during the trading course of the week. The fall of the gold prices can be related to the Market cheering the US Federal Reserve’s (Fed) signals of the March rate hike and room for more lift-offs. The Central bank has left the rate unchanged however he also made a notable change of tone toward the hawkish side. The major market mover was Fed Chair noting that he will not rule out rate increase at every meeting this year. He also opened the door to 50bp rate hikes rather than standard 25bp.  On the economy front, Powell said “quite a bit of room to raise rates without hurting employment.” Additionally, escalating geopolitical fears concerning the Russia-Ukraine issue also drown the gold prices.

Moreover, The greenback is also favored on the fourth-quarter GDP that had rose 6.9% saar vs expectations of a 5.5% rise. The GDP price index has also beat the expectations, rising 6.9% saar.              

The major economic events deciding the movement of the pair in the next week are ISM Manufacturing PMI at Feb 01, ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change at Feb 02, Initial Jobless Claims, ISM Non-Manufacturing PMI at Feb 03 and Nonfarm Payrolls at Feb 04 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.32% higher than the previous week. Maintaining high at 1853.8 and low at 1780.2 showed a movement of 736 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. Should 1763.1 proves to be unreliable support then the pair may fall further to 1734.9 and 1689.5 respectively whereas a solid breakout above 1836.7 will open a clear path upward to 1882.1 and then will further raise up to 1910.3. In H4 chart rounding top pattern favors prospects of a bearish trend. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.