March 28, 2023 (MLN): Gold prices dipped slightly in the Asia trading session on Tuesday as investors felt more confident about the global banking system after regulators intervened to calm the market, as Reuters reported.
In the latest meeting, U.S. Fed chair Jerome Powell stated that the banking system is safe and "All depositors' savings in the banking system are safe”.
Spot gold is currently 0.1% lower at $1,951.56 an ounce. U.S. gold futures edged up 0.1% to $1,956.60.
On Monday, gold fell over 1% as investors chose risk-on assets instead of risk-off assets like gold, following First Citizens BancShares’ announcement to acquire Silicon Valley Bank, which collapsed earlier this month due to a banking crisis.
Although according to Clifford Bennett, chief economist at ACY Securities, gold remains a solid refuge in the current risky situation for the banking sector.
After gold reached the psychological level of $2000, the market witnessed a sell-off mainly due to profit-taking, Bennett added.
According to the data of the CME Fed Watch tool, Investors also await the U.S. Federal Reserve’s next move on interest rates which is in May, with markets pricing in 51% odds of no change.
Heraeus Precious Metals noted that gold could face some resistance in the near term, but it could resume its upward trend if the U.S. economy enters a recession and the Fed cuts rates.
Wang Tao, a Reuters market analyst, who covers commodities and currencies using technical analysis methods also stated that gold might break above the multi-year resistance of $2,070 in the second quarter and head towards $2,148.
Among other precious metals, Silver and platinum also followed gold’s downward trend on Tuesday, as investors favored riskier assets over safe-havens.
Silver lost 0.7% of its value and traded at $22.94 per ounce. Platinum declined 0.5% and reached $967.32 per ounce. On the other hand, palladium rose 0.3% and stood at $1,412.73 per ounce.
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Posted on: 2023-03-28T15:12:04+05:00
