Investors have been flocking to gold and Treasurys as bank stocks have been whacked by the shuttering of Silicon Valley Bank and Credit Suisse’s implosion.
Sven Hoppe | Picture Alliance | Getty Images
Gold prices have more room to run as global banks struggle and the U.S. Federal Reserve renders another interest rate decision, potentially breaking all-time highs — and staying there.
“A sooner Fed pivot on rate hikes will likely cause another gold price surge due to a potential further decline in the U.S. dollar and bond yields,” said Tina Teng from financial services company CMC Markets. She expects gold will trade between $2,500 to $2,600 an ounce.
Investors have been flocking to gold and Treasurys as bank stocks have been whacked by the shuttering of Silicon Valley Bank and Credit Suisse’s implosion.
Gold is trading at $1,940.68 per ounce. On Monday, it breached $2,000 to strike its highest since March 2022. Gold has risen around 10% since early March when SVB was hit by a bank run.
Gold’s all-time high was $2,075 in August 2020, according to Refinitiv data. Demand from central banks will likely keep wind in its sails.
“Continued central bank buying of gold bodes well for long-term prices,” said CEO Randy Smallwood of Wheaton Precious Metals, a precious metals streaming company.
I think it’s very plausible that we see a strong performance in gold over the coming months. The stars appear to be aligning for gold which could see it break new highs before long.
Craig Erlam
Senior Market Analyst at Oanda
Fitch: Gold prices will stay at highs
In late March, Fitch Solutions predicted that gold would notch a high of $2,075 “in the coming weeks.” The firm based that outlook on “global financial instability,” adding that it expects gold to “remain elevated in the coming years compared to pre-Covid levels.”
“I think it’s very plausible that we see a strong performance in gold over the coming months. The stars appear to be aligning for gold which could see it break new highs before…
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