https://www.engineeringnews.co.za

Gold drops as investors digest SVB deal amid banking risks

27th March 2023

By: Reuters

  

Font size: - +

Gold prices fell for a second straight session on Monday as the US dollar firmed, while investors weighed measures taken by authorities to assuage fears of a crisis in the global banking sector.

Spot gold was down 0.5% at $1 967.86 per ounce, as of 06:32 GMT. US gold futures slipped 0.8% to $1 968.90.

The dollar index rose 0.2% and made bullion less affordable for overseas buyers. 

First Citizens BancShares will acquire all of Silicon Valley Bank's deposits and loans from the Federal Deposit Insurance Corporation. The news cast an uneasy calm over fragile markets on Monday. 

"Markets continue to adopt a cautious stance... On net, the mix of growth worries, lingering concerns of banking stresses could benefit safe-haven proxies such as USD, JPY and gold in the interim," said OCBC FX strategist Christopher Wong

Gold had risen above the $2 000 mark after the sudden collapse of two US lenders, but has since pulled back from those levels after rescue measures by authorities, including UBS' takeover of ailing Credit Suisse.

However, worries persisted that regulators are yet to contain the worst shock to the banking sector since the 2008 financial crisis after shares of Deutsche Bank plunged on Friday.

Recent stress in the sector and the possibility of a follow-on credit crunch brings the United States closer to recession, Minneapolis U.S. Federal Reserve president Neel Kashkari said.

The threat of a recession has resulted in investors increasing their allocation to the precious metal in droves, ANZ said in a note.

Markets are pricing in a 70% chance of the Fed standing pat on interest rates at its May meeting, according to the CME FedWatch tool.

While gold is considered a hedge against inflation and economic uncertainties, higher interest rates discourage investment in non-yielding bullion.

Spot silver shed 1% to $22.99 per ounce, platinum lost 0.7% at $970.51 and palladium slipped 0.9% to $1 402.79.

Edited by Reuters

Article Enquiry

Email Article

Save Article

Feedback

To advertise email advertising@creamermedia.co.za or click here

Showroom

Schauenburg SmartMine IoT
Schauenburg SmartMine IoT

SmartMine IoT has been developed with the mining industry in mind, to provides our customers with powerful business intelligence and data modelling...

VISIT SHOWROOM 
Rentech
Rentech

Rentech provides renewable energy products and services to the local and selected African markets. Supplying inverters, lithium and lead-acid...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







301

sq:0.046 1.039s - 140pq - 2rq
Subscribe Now