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Gold slides for second straight session
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Silver down more than 1%
(Updates prices)
By Bharat Gautam
March 27 (Reuters) - Gold prices fell more than 1% on
Monday as worries over a crisis in the banking sector subsided,
prompting investors to scale back safe-haven trades in favour of
riskier assets like equities and crude oil.
Spot gold dropped 1.2% to $1,952.95 per ounce by 2:10
p.m. EDT (18:10 GMT). U.S. gold futures settled 1.5%
lower at $1,953.80.
There is a sense of calm in the markets and a flight back
into some of the risk-on assets, and all the safety trades like
gold are starting to sell off, said Phillip Streible, chief
market strategist at Blue Line Futures in Chicago.
A buyer for Silicon Valley Bank's deposits and loans helped
Wall Street's main indexes open higher, sending gold further
below the $2,000 mark breached last week. "Much of the rally on the gold market was really
short-covering," Streible said, adding that prices were likely
going to continue to come under pressure.
Recent banking sector stress and the possibility of a
follow-on credit crunch bring the U.S. closer to recession,
Minneapolis Fed president Neel Kashkari said. However, U.S.
Federal Reserve officials said there was no indication financial
stress was worsening.
"After kissing the psychological $2,000 level last week,
bears exploited this resistance to attack. Appetite for the
precious metal has also been dampened by a stabilising dollar
and mixed signals on monetary policy from the Fed," said Lukman
Otunuga, senior research analyst at FXTM. Last week, the Fed indicated it was on the verge of pausing
further increases in borrowing costs, boosting non-yielding
gold's appeal.
On the physical front, China's February net gold imports via
Hong Kong nearly tripled from the previous month.
Spot silver fell 1.1% to $22.98 per ounce, platinum eased 0.6% to $970.81, and palladium dipped 0.2% to $1,412.97. (Reporting by Bharat Govind Gautam, Deep Vakil and Ashitha Shivaprasad in Bengaluru; Editing by Krishna Chandra Eluri and Emelia Sithole-Matarise)
