Gold Rises To A Five-Week High As Banking Concerns Return

On Wednesday, gold prices rose to a new five-week high as concerns about the banking sector reappeared due to falling Credit Suisse stock. This stoked concerns about a potential global spread of the U.S. banking sector crisis and led investors to expect a change in Federal Reserve policy.

‍

Price Movement

• On the Comex, gold contracts for April delivery rose $17 or 0.9% to $1,928 per ounce (GC00, 1.02%; GCJ23, 1.04%).
• Gains of 35 cents or 1.6% brought May silver futures SI00, 1.07% SIK23, 1.04% to $22.40 per ounce.
• While platinum for April PLJ23, -3.47% fell by $32, or 3.2%, to $965 per ounce, palladium for June PAM23, -4.20% fell by $63, or 4.2%, to $1,454 per ounce.
• To reach $3.88 per pound, copper for May delivery HGK23, -2.70% dropped by 13 cents, or 3.2%.

‍

Market Forces

Markets ignored a slew of U.S. economic data released on Wednesday as concerns about the banking sector once more grabbed center stage, including a report on cost price that showed they fell 0.1% in February.

‍

"On strong safe-haven demand, both silver and gold prices are substantially up in early U.S. trading on Wednesday, both commodities recording five-week highs. Around mid-week, there are mounting concerns about a worldwide banking and financial catastrophe, according to Jim Wyckoff, senior consultant at Kitco.com.

‍

The Federal Reserve's potential aggressiveness in decreasing interest rates later this year was also revised by traders, which weighed on Treasury yields and the U.S. dollar while supporting gold.

‍