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Gold set for 3rd straight weekly gain
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Silver eyes best week since early Dec
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Gold biased to retest support at $1,917 - technicals
(Updates prices)
By Kavya Guduru
March 17 (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 was up 0.7% at $1,931.90 per ounce, as of
0747 GMT. Bullion has risen about 3.4% this week, heading for a
third consecutive weekly gain.
U.S. gold futures rose 0.7% to $1,936.10.
Bullion prices have 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 slipped 0.5%, making gold more
attractive to buyers holding other currencies. 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 climbed 1.1% to $21.95 per ounce,
platinum gained 0.9% to $981.04 and palladium rose
0.5% to $1,438.08.
All three metals were bound for weekly gains, with silver
set for its best week since early December.
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(Reporting by Kavya Guduru in Bengaluru; Editing by Sonali
Paul, Subhranshu Sahu and Rashmi Aich)
