March 16 (Reuters) - Gold edged higher on Thursday, helped by a weaker dollar, but prices held below last session's 6-week peak as risk sentiment improved after Credit Suisse, the latest focal point of a potential banking crisis, secured funds.
Spot gold rose 0.3% to $1,924.15 per ounce by 1122 GMT, after jumping to its highest since early Feb at $1,937.28 on Wednesday. U.S. gold futures fell 0.1% to $1,928.70.
Credit Suisse, which sparked a rout in European banking stocks on fears of its collapse, recovered 28% after saying it would borrow up to $54 billion from the Swiss central bank to shore up liquidity and investor confidence.
While the news had taken a bit of the shine off gold, bullion seems to have settled at a reasonably firm level, said independent analyst Ross Norman.
The dollar index was 0.2% lower, making bullion cheaper for overseas buyers. Gold prices in sterling were off the record-highs hit on Wednesday, while prices in euros also retreated.
Gold was enjoying a "knee-jerk rally", Norman added, with short covering potentially accounting for a large part of the gains, yet sentiment was broadly favourable towards gold.
The European Central Bank's meeting later on Thursday looms in what will be the first scheduled policy announcement since the collapse of U.S.-based Silicon Valley Bank last week, mostly due to elevated interest rates, triggered fears of a banking crisis.
Traders expect the ECB to raise rates by another 50 basis points. On the other side of the Atlantic, traders largely expect the Federal Reserve to raise rates by 25 bps at its policy meeting next week.
Bullion is considered a hedge against economic uncertainties, although higher rates increase the opportunity cost of holding the non-yielding asset.
Spot silver rose 0.9% to $21.98 per ounce, platinum gained 0.4% to $966.03 while palladium was up 0.6% at $1,455.81.
