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Gold could decline to $1,920/oz - analyst
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Volumes in SPDR Gold Shares highest since Oct
(Adds details, updates prices)
By Kavya Guduru
March 30 (Reuters) - Gold prices reversed course to
trade higher on Thursday, as a slightly softer dollar helped
counter risk appetite fuelled by easing concerns about the
global banking system.
Spot gold was up 0.3% at $1,968.89 per ounce, as of
0738 GMT. U.S. gold futures were unchanged at $1,984.70.
The dollar index eased 0.1%, making bullion more
affordable for buyers holding other currencies, while Asia's
stock markets held recent gains. "In the short term, profit-taking as well as reduced fears
of further contagion amongst banks should see the gold price
continue to decline back towards $1,920/oz," said Michael
Langford, director at corporate advisory firm AirGuide.
Gold rose above the $2,000 mark after the sudden collapse of
two U.S. lenders earlier this month, but has since retreated
from those levels as authorities stepped in with rescue
measures, including UBS' takeover of ailing Credit Suisse and
First Citizens BancShares' deal to buy failed Silicon Valley
Bank.
However, the metal "held up relatively well against the
headwinds", analysts at ANZ said in a note.
"Gold continues to see strong inflows in ETFs. Volumes in SPDR Gold Shares, the largest gold-backed ETF, have surged to their highest level since October," they said. Market participants now await Friday's U.S. Personal Consumption Expenditures data, the Federal Reserve's preferred inflation measure, for further monetary policy clues. The Fed will make its interest rate decisions from here on a meeting-to-meeting basis and will take financial conditions into account in that judgment alongside other factors, Fed Vice Chair for Supervision Michael Barr said on Wednesday.
The opportunity cost of holding non-yielding gold rises when interest rates are increased to bring down inflation. Markets see a 39.2% chance of the Fed raising interest rates by 25 basis points in May, according to the CME FedWatch tool. Spot silver climbed 1.2% to $23.63 per ounce, platinum rose 0.4% to $971.12 and palladium gained 0.8% to $1,450.86.
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(Reporting by Kavya Guduru in Bengaluru; Editing by Subhranshu
Sahu)
