An extremely insignificant rebound in the gold price on Friday after a strong sell-off in the previous session did not affect the price drop for the entire week.
The quotes remained around the level of $1,754 per ounce. An unexpected increase in US retail sales in August at the beginning of the week revived fears of a reduction in the Fed's stimulus in the near future, which led to an increase in the dollar and a decline in gold by almost 3% on Thursday. The market is almost sure that the Fed will reduce the purchase of securities, and this will increase the yield of US Treasury bonds. This does not bode well for gold and will not allow it to return to the highs of last year. The dollar rose to a three-week peak, which made gold more expensive for holders of other currencies, while Treasury bond yields also increased. Before the Fed meeting, the quotes are likely to stay in the range of 1750-1780 dollars per ounce. In the future, a strong hawkish shift may provoke another sharp reaction towards a decline in gold prices. The curtailment of economic support measures not only weakens the status of the precious metal as a safe haven, but any subsequent increase in interest rates will lead to an increase in the opportunity cost of owning the asset.
In the forecast for the coming week, we assume a corrective recovery of the gold price to the levels of 1760, 1765 and 1770 dollars per ounce.