- The gold price rose on Friday, extending its weekly gains above $100.
- The new context of lower yields and the nervousness of banks boost the demand for gold.
- XAU/USD points to the best week in years.
The price of gold continued to rise during the American sessions, breaking above $1,980. Late on Friday, XAU/USD settled at $1,982, the highest level since April 2022 and on track for the third-highest weekly close on record.
From the level it had a week ago, the yellow metal is up 6.3%. A sharp reversal in US Treasury yields is fueling the gold price rally. US Treasury yields are having their highest week in years. The financial turmoil weighed on monetary policy expectations and the economic outlook.
The Federal Reserve will announce its decision next week. A rate hike of 25 basis points is expected. A few days ago, analysts were wondering 25 or 50 after the US inflation and employment data. The new scenario includes the probabilities of a pause in the next meeting. Things have changed dramatically, causing an impressive recovery in XAU/USD.
Gold seems likely to break above $2,000 next week. Even when the price moves consistently higher, it makes strong corrections. In the current context, traders should exercise caution.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
