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Gold off 6-week highs hit on Wednesday
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Gold seen topping $2,000/oz this year - JP Morgan
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Fed seen raising rates by 25 bps
(Adds comments, details and graphic, updates prices)
By Kavya Guduru
March 16 (Reuters) - Safe-haven gold paused its rally on
Thursday as traders positioned for more developments surrounding
the banking sector crisis after Credit Suisse became the latest
focal point.
Spot gold ticked 0.1% lower to $1,916.89 per ounce,
as of 0648 GMT, after jumping more than 1% to $1,937.28 on
Wednesday. U.S. gold futures shed 0.5% to $1,922.00.
Slowing some of the selloff in equity markets, Credit Suisse
Group AG said on Thursday it intended to borrow up to 50 billion
francs ($54 billion) from the Swiss National Bank to boost its
liquidity after the flagship Swiss lender's shares slumped on
Wednesday. While investors are looking for a safe asset to park money
after the banking crisis, triggering gold's recent rallies,
they're now awaiting fresh cues, said Hareesh V, head of
commodity research at Geojit Financial Services, terming the
slight pullback on Thursday a technical correction.
Overall, gold was also buoyed by softness in the rival safe-haven dollar , making bullion cheaper for overseas buyers. "Longer-term, gold's strong average performance in the lead-up to and following both initial Fed rate cuts and U.S. recessions keeps us biased for higher prices as macro uncertainty swirls," JP Morgan analysts said in a note, forecasting gold to top $2,000/oz this year. Bullion is considered a hedge against economic uncertainties, although higher rates increase the opportunity cost of holding the non-yielding asset. Markets are now pricing a 68.9% chance for a 25 basis-point hike at the U.S. Federal Reserve's March meeting. Goldman Sachs raised its probability of the U.S. economy entering a recession in the next 12 months to 35% amid the small bank stress. Spot silver slipped 0.4% to $21.69 per ounce, platinum was 0.1% lower at $961.27, while palladium lost 0.5% at $1,455.03.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ xau ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips and Eileen Soreng)
