Gold Price Forecast: XAU/USD gains more than 3%, approaches $2,000
- Gold price surged on Friday, extending weekly gains to over $100.
- New context of lower yields and banking jitters boost gold’s demand.
- XAU/USD eye best week in years.
Gold price moved further to the upside during the American sessions, breaking above $1,980. Late on Friday, XAU/USD stands at $1,982 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 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.
Seen Gold price above $2,000 next week looks likely. Even when price moves consistently to the upside, it makes sharp corrections. In the current context, traders should take extra caution.
Technical levels