Gold Prices Dip From $2,000, Banking Crisis in FocusAdministrator_India | March 27, 2023 | 0 | Uncategorized
Gold prices retreated on Monday as traders locked in profits after a strong run of gains, but remained near key levels hit last week as fears of a global banking crisis kept safe haven demand high. Bullion prices surged to the over $2,000 last week amid concerns over the next domino to fall among U.S. and European banks, with the yellow metal largely outpacing the dollar as a safe haven asset this year. Gold saw some profit taking on Monday, also coming under pressure from a slight resurgence in the dollar after some Federal Reserve officials said the bank could hike rates at least two more times. Spot gold fell 0.2% to $1,974.54 an ounce, while gold futures expiring in June fell 0.4% to $1,994.76 an ounce by 20:42 ET (00:42 GMT). U.S. and European officials warned over the weekend that the banking sector was being closely monitored for any signs of a potential credit crunch. The latest source of market concern came from Deutsche Bank AG (ETR:DBKGn), whose shares plummeted last week after the cost of insuring the bank’s debt against potential default shot up to near five-year highs. Markets are fearful over the collapse of any European banks after Swiss lender Credit Suisse Group (NYSE:CS) was taken over by peer UBS Group AG (NYSE:UBS) in an emergency deal brokered by regulators.
Minneapolis Fed President Neel Kashkari said that it Was Still Too Soon to Gauge.
what sort of impact a banking crisis will have on the economy, and how it could influence interest rate decisions. But European Central Bank Vice President Luis de Guindos warned that a banking crisis will likely result in lower growth and inflation. The ECB has so far stated it will keep tightening monetary policy. Gold and other precious metals rallied over the past three weeks as fears of a banking crisis ramped up bets of less policy tightening this year. While the Federal Reserve hiked rates as expected last week, it also hinted that peak interest rates were within reach. Gold is likely to remain underpinned in the coming days amid persistent fears of a banking crisis. Other precious metals also retreated from recent gains on Monday, with platinum futures down 0.2%, while silver futures fell 0.1%. Among industrial metals, copper prices fell slightly after logging sharp swings in previous sessions as markets weighed a weaker dollar against fears of slowing global economic growth.