Massing gold selling hit the market last week. Gold made a pullback of $200 and further price gains looked dubious. Equally steep sell-off was last seen in April 2013. Gold bears entered the market for obvious reason: the stellar rally of the precious metal and overbought market conditions.

Earlier, even adamant gold fans did not expect such a stunning gold rally. In fact, the metal surpassed the psychological level of $2,000 per ounce in just a month.

According to analysts at Standard Chartered, it is essential to figure out whether profit taking was a short-term tactical liquidation or whether investment in gold-backed ETPs becomes vulnerable.

This trading week, gold bulls were caught off-guard by a spike in the yields of US Treasuries. Not long ago, Treasuries' yields seemed to be doomed to a protracted downtrend. Another surprise event was a surprise bounce of the US dollar.

The background for these events was publication of the minutes of July's policy meeting of the Federal Reserve.

The following points in the content set the market in motion. The regulator dropped the idea of controlling the yield curve of Treasuries. Besides, the central bank confirmed a slow recovery of the domestic economy in the wake of the COVID-19-induced crisis. The Fed said it is ready to keep interest rates at almost a zero level long as necessary to shore up the economy. At the same, negative interest rates are inappropriate for the time being. Logically, gold should have skyrocketed under such developments. In practice, traders acted in the opposite way, having pushed yields of the benchmark 10-year Treasuries 2% upwards. In this context, the US dollar index jumped by 1 basis point to 93.

Next week, Fed Chairman Jerome Powell is due to make a keynote speech at the symposium in Jackson Hole. He is going to express the official stance on forward guidance for monetary policy. Perhaps his ideas will cool down the zeal of dollar bulls.

Experts at Standard Chartered reckon that some factors could pose risks for gold until the end of summer and in the autumn 2020. These risks are invention of the COVID-19 vaccine, a rapid recovery of the global economy, and weak physical demand for gold.

At the same time, Standard Chartered maintains the bullish outlook for the precious metal.

"Barring further profit-taking, we think the longer-term uptrend is intact given USD weakness and the scale of stimulus and as we expect interest rates to remain low or negative. Price dips are likely to be viewed as buying opportunities as the macro backdrop remains favourable for gold," analysts state their view on gold prospects.

Most market participants still believe that gold has enough momentum to conquer such dazzling highs as $2,300 per troy ounce in the near future. Some experts are more optimistic, projecting the rally to $3,000 and $5,000 per ounce.