Gold sparkles in stormy week for markets
Published by
ScrapPrices
Published on March 17,2023 08:00 AM Metals
Gold prices surged more than 2% on Friday as a wave of banking crises shook global markets and powered bullion's biggest weekly rise in four months, while bets solidified for a less aggressive U.S. Federal Reserve in its fight against inflation.
Gold sparkles in stormy week for markets

March 17 (Reuters) - Gold prices surged more than 2% on Friday as a wave of banking crises shook global markets and powered bullion's biggest weekly rise in four months, while bets solidified for a less aggressive U.S. Federal Reserve in its fight against inflation.

Spot gold climbed 2% to $1,957.19 per ounce by 12:34 p.m. EDT (1634 GMT), after ascending 2.4% to $1,964.73 earlier, its highest level since April 2022. Bullion has risen about 4.9% this week.

U.S. gold futures were up 2% at $1,962.

"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," said Tai Wong, an independent metals trader based in New York.

The collapse of Silicon Valley Bank (SVB) in the U.S. has highlighted banks' vulnerabilities to sharply higher rates, while a rout in Credit Suisse (CSGN.S) shares has deepened the 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 slid, making bullion a more attractive investment. While it is considered a hedge against economic uncertainties, gold's opportunity cost rises when interest rates are increased.

The Fed will raise interest rates by 25 basis points on March 22 despite the 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.

Elsewhere, silver was set for the biggest weekly percentage rise of the four precious metals. It added 1.9% to $22.14 per ounce.

Platinum dipped 0.2% to $970.86, while palladium dropped 2.2% to $1,399.77.

"The sudden tightening in financial conditions won't help palladium, whose usage is largely industrial though it is technically in the precious complex," Wong said, adding that platinum "has just been a chronic underperformer and is struggling to shake its reputation."

 
MORE METALS NEWS
May 26,2023 08:00 AM
The World Bank’s metals and minerals price index rose 10 percent in the first quarter of 2023. Price increases reflected positive sentiment about stronger demand amid supply disruptions for some key metals. Metal prices are expected to fall this year as supply recovers amid weak demand in advanced economies and China. A stronger-than-expected recovery in China’s real estate sector and supply disruptions are key upside risks to the price forecast.
May 25,2023 09:00 AM
Gold slid to its lowest in two months on Thursday as optimism around the U.S. debt ceiling talks lowered safe-haven demand for bullion and robust economic data fueled bets of another rate hike by the Federal Reserve.
May 25,2023 08:00 AM
China's imports of refined nickel have fallen to levels last seen almost 20 years ago, when the country's build-out of industrial capacity was still in its infancy.