Gold Approaching $2000 Threshold on Friday

Gold price surged further to the upside during the US, breaking above $1,988.50 per ounce at the time of writing. Late on Friday, the Gold Index XAU/USD stands at the highest level since April 2022 and on its way to the third-highest weekly close on record.

From the level it had a week ago, the yellow metal is up by 6.3%. A sharp reversal in Treasury yields is driving the rally in gold price. Bonds are having the week in years. Financial turmoil weighed on monetary policy expectations and the economic outlook.

Next week the Federal Reserve will announce its interest rate policy decision. A 25 basis point rate hike is expected. A few days ago, analysts were asking 25 or 50 after US inflation and employment data. The new scenario includes the odds of a pause at the upcoming meeting. Things have changed dramatically, triggering an impressive rally in XAU/USD.

Next week, gold’s price rising above $2,000 seems likely. Price makes abrupt declines even when it climbs continuously in the upside direction. Trading in this environment requires particular prudence.