Stagflation risk is back impacting gold price’s reactions

As the looming energy crisis stirs up old inflation fears, stagflation risk is back in the market, carrying some good news for gold, which proved this week that there is strong buying interest below the USD 1,750 per ounce level, according to analysts.
After falling towards USD 1,720 per ounce mid week, gold surprised with a quick double-digit recovery to USD 1,760 on Friday.
The original downward pressure on gold came as markets prepared for the Fed’s tapering in November. This pushed U.S. Treasury yields and the U.S. dollar higher while putting strong downward pressure on gold.
What’s been driving gold these days is market pricing of Fed’s exit. Both the tapering and a potential rate hike on the horizon were being priced in, as a result, substantial repricing of the Treasury markets is seen, and that has been primarily impacting on gold.