Gold set for 3rd straight weekly gain, Silver eyes best week since early Dec, Platinum, palladium both set for weekly gains
By Kavya Guduru | Mar 16, 2023
(Reuters) -Gold advanced on Friday buoyed by a weaker dollar and was poised for its biggest weekly gain since mid-November, as a global banking crisis sent investors flocking to the safe-haven metal. Spot gold XAU= was up 0.5% at $1,928.45 per ounce, as of 0612 GMT. Bullion has risen about 3.2% this week, heading for a third consecutive weekly gain.
U.S. gold futures GCv1 rose 0.5% to $1,932.60. Prices jumped more than 5%, or by about $100, on safe-haven demand after the collapse of U.S.-based Silicon Valley Bank last week. Large U.S. banks injected $30 billion in deposits into First Republic Bank on Thursday to rescue the lender caught up in a widening banking crisis. This came after Swiss lender Credit Suisse said it would borrow up to $54 billion from the Swiss National Bank to shore up liquidity.
The banking crisis seemed supportive for gold "because it led to... the general sense that with this market risk and with credit stress, central banks might back off (on hiking rates)," said Ilya Spivak, head of global macro, Tastylive. But the European Central Bank raised interest rates by 50 basis points (bps) on Thursday, as concerns over high inflation outstripped fears of the banking crisis. U.S. central bankers are seen pressing on with their inflation-fighting campaign with a 25 bps rate hike at their March policy meeting.
The opportunity cost of holding non-yielding bullion rises when interest rates are increased to bring down inflation.
The dollar index .DXY was down 0.3%, making gold more attractive to buyers holding other currencies. USD/
Gold is biased to retest a support at $1,917, a break below which could open towards a range of $1,905-$1,917, Reuters technical analyst Wang Tao said.
Spot silver XAG= rose 0.9% to 21.90 per ounce, platinum XPT= climbed 1% at $982.42 and palladium XPD = jumped 1.3% to $1,448.78.
All three metals were bound for weekly gains, with silver set for its best week since early December. (Source: www.xm.com)