March 20 (Reuters) - Gold prices dropped 1% on Monday,
with their safe-haven appeal diminished as risk sentiment
improved after Swiss lender UBS sealed a deal to buy peer Credit
Suisse in a rescue effort to contain a banking crisis and
stabilise global financial markets.
FUNDAMENTALS
* Spot gold was down 1% at $1,969.14 per ounce, as of
0105 GMT, retreating from its highest level since April 2022 hit
earlier in the session. U.S. gold futures rose 0.2% to
$1,977.60.
* On Sunday, UBS agreed to buy 167-year-old Credit Suisse
for 3 billion Swiss francs ($3.23 billion) and assume up to $5.4
billion in losses in a deal backed by a massive Swiss guarantee
and expected to close by the end of 2023.
* Top central banks, faced with the risk of a fast-moving
loss of confidence in the stability of the financial system,
moved on Sunday to bolster the flow of cash around the world.
* Asian stocks steadied and U.S futures rose on Monday in
relief at a weekend rescue deal for Credit Suisse, though trade
was tense and volatile as contagion fears stalked financial
shares.
* The dollar edged up 0.1%, making bullion less
attractive for buyers holding other currencies.
* A rally in bullion prices sparked by the global banking
rout forced Indian dealers to offer steeper discounts on
physical gold to lure retail customers and led to a drop in
China premiums last week, while tempting some to resort to
selling.
* Spot silver dipped 1.4% to $22.27 per ounce,
platinum fell 0.4% to $971.92 and palladium eased
0.1% to $1,418.26.
DATA/EVENTS (GMT)
0115 China Loan Prime Rate 1Y, 5Y March
1000 EU Total Trade Balance SA Jan
(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry
Jacob-Phillips)
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