The spot price of gold passed the $2,000-an-ounce benchmark in the early hours of March 20, as traders sought a “safe haven” amid more bad news from the banking sector.
At press time, the yellow metal was trading at $1,997 an ounce, after briefly rising as high as $2,031. Overall, gold is trading at its highest level since March 2022.
While the spot price of gold has now slipped back below the $2,000 benchmark, most analysts believe the current run may have staying power, particularly if financial news continues to be bad.
“We maintain a bullish outlook for gold, especially if the Federal Open Market Committee, driven by the current banking and liquidity crisis, is forced to change its focus away from fighting inflation to maintaining stability,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a note seen by CNBC.
Gold’s recent run has been fueled by news that Switzerland’s biggest bank, UBS, had purchased its unsteady rival Credit Suisse in an emergency rescue deal meant to stave off further contagion. The issues at Credit Suisse follow the failures of two U.S. banks—Silicon Valley Bank and Signature—which fueled gold’s rise last week.
Gold’s all-time high was $2,067 an ounce, which it hit in August 2020, during the COVID-19 pandemic.
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