Gold prices continued to climb on Friday as investors turn their attention to safe haven assets amid concerns of further market turbulence triggered by the banking crisis in the US and Europe.
The precious metal has been extending gains since Monday, when it opened trading at $1,879 per ounce, to $1,936 on Friday afternoon, having started the day at $1,921.
Investors traditionally turn to gold in times of market uncertainty, to hedge risks. Throughout history, the precious metal has been seen as a reliable investment instrument during periods of economic instability, stock market crises, military conflicts and pandemics.
Investors are now ramping up gold-buying, seeking protection from the contagion affecting the US banking sector.
“The question on traders’ lips now is whether fear is baked in, meaning yields could pare declines as the dust settles, which could be a near-term headwind for gold, or if the turbulence is just getting started. Time will tell but further fallout could see gold move closer to February highs, around $1,960, with $2,000 then key above that,” senior market analyst at Oanda, Craig Erlam, said.
Leading US banks are teaming up to inject $30 billion into distressed First Republic Bank in the midst of a widening banking crisis triggered by the collapse of two other mid-size lenders, SVB and Signature bank.
Bank of America, Citigroup, JPMorgan Chase and Wells Fargo said they would each make a $5 billion uninsured deposit, while Goldman Sachs and Morgan Stanley are each depositing $2.5 billion. BNY-Mellon, PNC Bank, State Street, Truist, and US Bank have pledged $1 billion each.
This article was originally published by RT.