Gold prices surged over 2% on Friday as a wave of banking crises shook markets in what would be bullion’s biggest weekly rise since November. Bets also solidified for a less aggressive rate hike by the US Federal Reserve, adding appeal to the non-yielding metal.
Spot gold was up by 2.1% to $1,959.92 per ounce by 12:15 p.m. ET, its highest in almost a year. US gold futures also gained 2.0% to $1,961.90 an ounce.
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“Gold is surging on fears that more bad banking news could appear over the weekend and hopes that the Fed will pause its rate hikes next week,” Tai Wong, an independent metals trader based in New York, told Reuters.
The collapse of Silicon Valley Bank (SVB), the second-largest bank crash in US history, has highlighted banks’ vulnerabilities to sharply higher rates, while a rout in Credit Suisse shares has added to global market turmoil.
“Gold is likely to shine through the chaos as investors adopt a guarded stance,” said Lukman Otunuga, senior research analyst at FXTM. The dollar and stock markets continued to slide on Friday, making the safe-haven metal a more attractive investment.
Still, the Fed is expected to raise interest rates by 25 basis points next week despite recent banking sector turmoil, according to a strong majority of economists polled by Reuters who were divided on the risks to their terminal rate view.
(With files from Reuters)
Read more: Gold price bulls hope short-term bank contagion sparks longer-term rally
Source: MINING.COM – Read More
