Gold prices rose ahead this week reaching a high of USD 1794.23, 6.7% off the yearly lows with a rebound off support. Bullion surged 1.5% on Thursday and is heading for a run of three straight weekly gains after China fired missiles over Taiwan during military drills. Beijing has responded aggressively to US House Speaker Nancy Pelosi’s visit to the island this week, the highest-ranking American politician to go there in 25 years.
Gold has benefitted from a weakening dollar, falling US bond yields and some haven support amid the ongoing geopolitical risks. Bullish comments from Federal Reserve officials pledged the central bank would continue an aggressive fight to cool soaring inflation.
In the week ahead, as investors and the US Federal Reserve continue to closely monitor data and sentiment seems to shift after every release at the minute, next week’s inflation data is set to show inflation still at dangerously high levels. Should this be the case we could see a rising dollar which could lead to further downside for the precious metal.
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