“Gold Prices Fall on Banking Concerns, but on Track for Biggest Weekly Gain in Two Months”

Investing.com – Gold prices fell on Friday, but were on track for their biggest weekly gain in nearly two months, as hopes of a pause in a lifting cycle, along with resurgent banking concerns, boosted the precious metal’s appeal.

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Gold and the dollar now

It fell by 0.05% to $2054.

While it fell at $2046 an ounce, by 0.17%.

It decreased by 0.22%, to score 100.96 points.

gold when settling yesterday

Gold prices rose towards record levels when settling transactions, yesterday, Thursday, with the escalation of fears of a banking crisis in the United States.

During today’s trading, spot contracts rose at $2072.19, close to their record level at $2072.49, while futures contracts reached $2056.10.

Gold futures rose by 0.9% at the settlement yesterday, or the equivalent of $18.7, to reach $2055.7 an ounce.

Banking crisis

Meanwhile, PacWest Bancorp’s decision to explore strategic options raised investor concerns about the widening financial crisis.

And the US banking crisis worsened yesterday, as the stocks of many US banks witnessed a strong decline, which prompted the issuance of many news reports about the study of Buck West and Western Alliance banks receiving selling offers to protect themselves from collapse due to their weak financial soundness and the rise in outflows of deposits.

And the shares of some US banks continued their sharp decline, with the escalation of concern about the spread of infection with the collapse of banks, as the shares of “Bacoist” and “Western Alliance” banks fell by large rates of more than 50%, while the “KBW” index of US bank shares fell by more than 5%. %.

ANZ said in a note that rising risks to the US economy have also supported strong investor demand for gold as they seek safe-haven assets.

Economic uncertainty and low interest boost demand for zero-yield assets.

The White House Council of Economic Advisers published a report in which they talked about the risks behind the country’s failure to raise the government debt limit, which could amount to the loss of 8.3 million jobs, a drop in gross domestic product by 6.1%, and a stock market collapse to half of its current value.

Important data

“Given that the Fed will be data-driven and not consider rate cuts this year, traders will actively seek weak data from the US to justify potential rate cuts,” said Matt Simpson, senior market analyst at City Index.

Yesterday, data from the Labor Department showed that US jobless claims rose at the largest pace in 6 weeks, by 13,000 to 242,000 last week.

Investors are awaiting the US Labor Department’s (NFP) non-farm payrolls data, which is due to be released at 12:30 GMT.

Simpson said: “We expect the bears to dominate the dollar index trading if the data comes out weak this time, which may lead to a rise in gold… as the strong report may be a source of concern for gold.”

Federal Reserve Chairman Jerome Powell backtracked from market expectations of a rate cut this year and highlighted that the central bank will monitor incoming data to determine future monetary policy decisions.

According to Reuters, Lorraine Goodwin, an economist at New York Life Investments, said that while the idea of ​​a temporary pause in interest rate hikes in the United States was good news for investors, it comes with an implication that the economy is slowing.