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All eyes on Federal Reserve policy meeting this week
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Gold surpassed key $2,000/ounce level earlier
(Updates prices)
By Seher Dareen
March 20 (Reuters) - Gold prices retreated from their
highest level in a year in volatile trading on Monday, as share
markets and Treasury yields bounced back on central banks'
efforts to shore up confidence in the financial sector.
Spot gold dipped 0.5% to $1,977.18 per ounce by
1:57 p.m. EDT (1757 GMT), after sliding over 1%, while U.S. gold
futures rose 0.5% to settle at $1,982.80.
Earlier in the session, prices of the yellow metal had
climbed 1% to their highest since March 2022 at $2,009.59, just
shy of a record set during the onset of the COVID-19 pandemic.
"While emergency efforts are being done... now you're seeing
that this is far from over. Safe-haven flows are fairly going to
be the key trade," Edward Moya, senior market analyst at OANDA,
said.
In an effort to help the banking sector, top central banks
moved on Sunday to bolster the flow of cash around the world.
Benchmark Treasury yields rose close to their session highs,
while equities bounced back on the rescue of Credit Suisse which
helped calm some jitters around a bigger banking crisis. Gold prices have rallied more than $100 after the collapse
of U.S.-based Silicon Valley Bank earlier this month.
"Today's rejection above $2,000 may trigger some profit-taking, but in our opinion not a change in direction," Ole Hansen, head of commodity strategy at Saxo Bank, said in a note, adding he maintains a bullish outlook on gold. Bullion is considered a safe-haven asset during financial uncertainty, and lower interest rates reduce the opportunity cost of holding the non-yielding bullion, making it more attractive. A key U.S. central bank policy announcement is due on Wednesday. Market participants are mixed on the Federal Reserve's decision, while bets for a rate-hike pause have increased. Spot silver fell 0.4% to $22.50 per ounce, platinum firmed 1.1% at $986.27, and palladium dipped 0.5% to $1,413.08. (Reporting by Seher Dareen and Swati Verma in Bengaluru; Additional reporting by Bharat Govind Gautam; Editing by Shilpi Majumdar)
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