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Gold posts a 4th straight weekly gain as bank jitters spread to Deutsche Bank

MarketWatch logo MarketWatch 3/24/2023 Myra P. Saefong
© arne dedert/Agence France-Presse/Getty Images

Gold futures ended Friday with a loss, failing hold above the key $2,000-an-ounce level, but prices scored a fourth consecutive weekly gain as banking-sector fears spread to Germany’s Deutsche Bank.

Silver prices also climbed, settling to their highest level in about seven weeks.

Price action
  • Gold futures for April delivery fell $12.10, or 0.6%, to settle at $1,983.80 per ounce on Comex after ending Thursday at $1,995.90, the highest for a most-active contract since March 10, 2022. For the week, prices marked a gain of 0.5%, up a fourth straight week, according to Dow Jones Market Data.
  • Silver futures for May rose by 8 cents, or 0.4%, to $23.339 per ounce, ending at its highest level since early February. For the week, prices rose 3.9%
  • Palladium futures for June delivery fell by $18.40, or 1.3%, to $1,414.40 per ounce, up 2% for the week, while April platinum declined by $9, or 0.9%, to $983.90 per ounce, for a weekly rise of 0.5%.
  • Copper futures for May delivery fell by 5 cents, or 1.2%, to $4.075 per pound, posting a weekly gain of 4.7%.
Market drivers

“The curse of the big round number has struck again,” Adrian Ash, director of research at BullionVault, told MarketWatch, with gold struggling to get past $2,000.”

Gold futures traded as high as $2,006.50 in Friday dealings, after touching intraday highs above $2,000 two other times this week, but prices still haven’t settled above that key mark since March 10 of last year.

The precious metal continues to be “influenced by various fundamental forces ranging from [Federal Reserve interest rate] hike expectations, lingering banking fears, dollar weakness, and falling Treasury yields,” said Lukman Otunuga, manager, market analysis at FXTM.

Gold continues to be “influenced by various fundamental forces ranging from [Federal Reserve interest rate] hike expectations, lingering banking fears, dollar weakness, and falling Treasury yields.” — Lukman Otunuga, FXTM

Read: Fed’s Barkin says high inflation made case for rate hike ‘pretty clear’

Also see: Fed’s Bullard wants to press ahead with higher interest rates, thinks financial stress will abate

Still, given how the recent chaos across markets has fueled speculation around the Fed cutting rates in 2023, “gold has the potential to push higher,” Otunuga told MarketWatch. “In the meantime, expect the precious metal to display high levels of sensitivity to key economic reports, including inflation.”

Gold has benefited from safe-haven inflows since the collapse of California’s Silicon Valley Bank earlier this month.

A risk-off mood returned to global markets early Friday as Deutsche Bank AG shares slumped, while Treasury yields declined as investors sought out the safety of government debt.

Just like in 2008, when gold first topped $1,000 an ounce on the Bear Stearns’ bailout, “gold has found a strong bid from anxious savers and investors, but in a genuine crisis everything gets sold,” said Ash, noting that steep losses in equities can become a headwind for bullion.

U.S. benchmark stock indexes fell early Friday, but recovered some ground in the afternoon.

The big difference from 15 years ago is the strong bid coming from central-bank buying and also China’s private-sector gold demand, said Ash.

“Short-term panics aside, the underlying strength that’s seen gold stair-stepping higher across the last five years looks set to continue, with a rising floor built by emerging-market sovereigns and households,” he said.


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