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Focus on Fed policy meeting next week
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Gold to shine through the chaos - analyst
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All precious metals head for weekly gains
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Gold touches 11-month high
(Updates prices)
By Bharat Gautam
March 17 (Reuters) - Gold prices surged more than 2% on
Friday as a wave of banking crises shook global markets and put
bullion on track for its biggest weekly rise in three years,
while bets solidified for a less aggressive Federal Reserve in
its fight against inflation.
Spot gold climbed 2.8% to $1,971.95 per ounce by 1:47
p.m. ET (1747 GMT), highest since April 2022. Bullion has added
about 5.6% this week, the most since March 2020.
U.S. gold futures gained 2.6% to settle at $1,973.50.
"Gold is surging on fears that more bad banking news could
appear over the weekend and hopes that the Fed will pause its
rate hikes next week," said Tai Wong, an independent metals
trader based in New York.
The collapse of Silicon Valley Bank in the U.S. has
highlighted banks' vulnerabilities to sharply higher rates,
while a rout in Credit Suisse shares has added to the
market turmoil.
"Gold is likely to shine through the chaos as investors
adopt a guarded stance," said Lukman Otunuga, senior research
analyst at FXTM.
The dollar and stock markets slid, making bullion a more
attractive investment. While it is considered a hedge against
economic uncertainties, gold's opportunity cost rises when
interest rates are increased. The Fed will raise interest rates by 25 basis points on
March 22 despite the recent banking sector turmoil, according to
a majority of economists polled by Reuters. Silver was set for the biggest weekly percentage rise
among the four precious metals. It advanced 3.1% to $22.38 per
ounce on Friday.
Platinum firmed 0.1% to $974.21, while palladium dropped 2% to $1,401.63.
"The sudden tightening in financial conditions won't help
palladium, whose usage is largely industrial though it is
technically in the precious complex," Wong said, adding that
platinum "has just been a chronic underperformer and is
struggling to shake its reputation".
(Reporting by Bharat Govind Gautam and Seher Dareen in
Bengaluru; Editing by Matthew Lewis and Shounak Dasgupta)
