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Gold Price Forecast: XAU/USD skyrockets, trades near record highs

Spot Gold runs past the $2,100 mark on Monday, extending its Friday rally although at a slower pace. XAU/USD added roughly $55.00 in the last trading day of the previous week, its largest intraday gain since last December.

The bright metal began advancing on Thursday, following the release of in-line with expectations United States (US) inflation figures. The Federal Reserve’s (Fed) favorite inflation figure, the   January Core Personal Consumption Expenditures (PCE) Price Index rose 0.4% for the month and 2.8% from a year ago, posting the slowest annual increase since March 2021. But it also brought relief, as the hotter-than-anticipated Consumer Price Index (CPI) released beforehand spurred speculation price pressures would be much higher.

The rally continued on Friday when the US published the Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI). The index fell to 47.9 in February, missing the 49.5 anticipated while below the previous 49.1. The figures revived concerns about the slowing economy, although not enough to change bets on when the Fed will move forward with rate cuts. Up to date, the first move is not expected before June, with speculative interest hoping policymakers will deliver fresh clues when they meet in mid-March.

Also on Friday, Treasury yields edged sharply lower, further weighing on the US Dollar against the bright metal. At the beginning of the new week, yields are slowly grinding higher, although the 10-year note currently offers 4.22%, not enough to change XAU/USD direction.

Source: FXstreet