Gold Sparkles In Stormy Week For Markets
Gold prices surged by more than 2% on Friday, driven by a wave of banking crises that have shaken global markets.
This has powered bullion to its 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 to $1,957.19 per ounce by 12:34 p.m. EDT (1634 GMT), after reaching its highest level since April 2022 at $1,964.73, up 2.4%.
Gold has risen approximately 4.9% this week. U.S. gold futures also rose 2% to $1,962. The dollar and stock markets slid, making bullion a more attractive investment.
Gold is seen as a hedge against economic uncertainties, but its opportunity cost increases when interest rates rise.
According to Tai Wong, an independent metals trader based in New York, “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.”
The recent 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.
Lukman Otunuga, senior research analyst at FXTM, stated that “Gold is likely to shine through the chaos as investors adopt a guarded stance.”
Meanwhile, silver is set for the largest weekly percentage rise of the four precious metals, adding 1.9% to $22.14 per ounce. Platinum dipped 0.2% to $970.86, while palladium dropped 2.2% to $1,399.77. Wong added that.
“The sudden tightening in financial conditions won’t help palladium, whose usage is largely industrial though it is technically in the precious complex,” and that platinum “has just been a chronic under performer and is struggling to shake its reputation.”
The Fed will raise interest rates by 25 basis points on March 22, despite the recent banking sector turmoil, although they were divided on the risks to their terminal rate view.
Source: https://businessdor.com/gold-sparkles-in-stormy-week-for-markets/
Do you want to To promote your business?
Get Your Business Featured at businessdor.com/get-featured/
Businessd’Or is a media company focused on business, innovation, investment, technology, entrepreneurship, leadership and lifestyle.
