Gold returned to $2,000 an ounce during Friday’s session but closed off those highs as the Dollar Index, which pits the U.S. currency against six majors rose for the first time in a week.
Traders are betting on further increases in the price of gold after it touched a 12-month high this week, as investors predict the US Federal Reserve’s cycle of interest rate rises is over and seek safe havens during banking sector turmoil. Prices slipped back after testing the level several times throughout the week, but trading in options contracts linked to the metal suggest many investors are expecting a more sustained rally in the weeks ahead. Financial investors generally make bets on gold prices through futures contracts, exchange traded funds, or options contracts tied to them.
Coinbase's former CTO, among others, has predicted that bitcoin will reach $1 million as the dollar fades, but these doomsayers are ignoring other historical precedents.