The ongoing banking crisis in the US, which has increased the yellow metal’s safe-haven appeal in recent weeks, caused gold prices to rise slightly.
All eyes are on the two US House and Senate committee hearings on Tuesday and Wednesday, which will look at the regulatory shortcomings that caused Silicon Valley Bank.
According to Craig Erlam, Senior Market Analyst at OANDA, UK, “If the turmoil in the banks subsides, we may see gold recapture some of its recent gains.
First Citizens BancShares Inc’s purchase of struggling Silicon Valley Bank offered some relief to financial markets and hurt gold’s safe-haven appeal on Monday. Prices also fell on Monday on concerns that the US Federal Reserve may continue to raise interest rates at its upcoming policy meetings despite ongoing stress in the US banking industry.
For the second time in a row, the US Federal Reserve raised interest rates by another 25 basis points last week, raising the federal funds rate to a range of 4.75 percent to 5 percent. However, the yellow metal’s safe-haven appeal helped stem the slide in gold prices as worries about the US banking crisis could trigger a credit crunch, experts say.
According to Jain, COMEX gold has support at $1,964-1,950 per ounce and resistance at $1,984-$2,000 per ounce. Gold prices on the Multi Commodities Exchange of India (MCX) support between Rs 58,920 and 58,660 per 10 grams, and oppose between Rs 59,400 and 59,720 per gram.
The second day of Gold Falls
There was little movement in gold prices on Tuesday, which had fallen 1% the day before. They remained below the one-year high of more than $2,000 hit last week as concerns about the banking crisis eased and risk appetite increased.
The Federal Deposit Insurance Corporation announced yesterday that First Citizens BancShares Inc. would purchase Silicon Valley Bank’s deposits and loans. However, demand for safe-haven assets has helped push the gold price up 7% this month, as recent banking turmoil in the US and Europe fueled concerns about an impending recession.
After a dip on Monday, gold prices are slightly higher in early Asian trade. A measure that could help reduce the high level of uncertainty in the banking system”. Gold may recover some of its recent gains if concerns about the banking industry continue to subside, warns Oanda’s senior market analyst Craig Erlam. Spot gold rose 0.1% to $1,958.68 an ounce.
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