Gold price reaches two-week peak as US yields fall, geopolitical tensions rise

Gold prices rally 1.50% on Friday, boosted by a decrease in US 10-year Treasury yields to 4.40%.

Escalating geopolitical concerns, including potential expansion of the Russia-Ukraine conflict, fuel demand for Bullion’s safe-haven status.

US economic data shows mixed signals; Services and Composite PMIs outperform while Manufacturing PMI remains in contraction.

Gold price rallies to a new two-week high on Friday during the North American session as US Treasury bond yields drop. Geopolitics continued to play its part, keeping the golden metal bid, while US business activity improved, capping the non-yielding metal advance. The XAU/USD trades at $2,710, gaining 1.50%.

The yellow metal surged due to a slight fall in US Treasury yields. The US 10-year T-note dipped two basis points to 4.40%, a tailwind for Bullion prices, set to print gains of more than 5% on the week.

Risks that the Russia-Ukraine war might broaden and transform into a US-Russia conflict keep Bullion prices higher. This and uncertainty about the Middle East conflict involving Israel and Lebanon may pave the way for retesting the XAU/USD all-time high at $2,790.

Data-wise, the US economic docket featured the release of S&P Global Flash PMIs for November. The Services and Composite indices expanded, exceeding estimates and October’s figures. However, the Manufacturing PMI, despite improving above forecasts and the previous month’s release, remained below the 50 line, which divides expansion/contraction territories.