Gold futures closed up to a five-week high on Monday (March 13) as investors flocked to safe-haven assets amid concerns over the bankruptcy of Silicon Valley Bank (SVB). The weak dollar and falling bond yields also supported gold’s safe asset position.
- Gold futures rose $49.30, or 2.64 percent, to close at $1,916.50 an ounce. This is the highest closing level since February 2, 2023.
- Silver futures rose $1.417, or 6.91%, to close at $21.923/ounce.
- Platinum contract rose $42.70, or 4.44%, to close at $1,004.90/ounce.
- Palladium futures rose $114.40, or 8.4%, to settle at $1,476.70/ounce.
The dollar index against a basket of six major currencies was down 0.95% at 103.5985, while the 10-year US Treasury yield was down to 3.470% overnight. A weak dollar makes gold contracts, priced in dollars, cheaper for investors holding other currencies, while a fall in US Treasury yields reduces the cost of holding gold as it is an asset without interest.
The bankruptcy of Silicon Valley Bank (SVB), the biggest crisis for the US banking sector since Lehman Brothers went bankrupt in 2008, has led to increased demand for safe-haven assets like gold. Investors are also waiting for the US to release the Consumer Price Index (CPI), which measures inflation on consumer spending in February. Analysts expect the headline CPI, which includes food and energy, to rise 6.0% in February year on year, slower than 6.2 percent in January. The core CPI excluding food and energy is expected to rise 5.5% year on year, slowed from 5.6% in February.
In conclusion, gold futures have risen to a five-week high as investors seek safe-haven assets amid concerns over the SVB bankruptcy and a weak dollar. The market is also waiting for the release of the CPI data later today.
The Spot Market is Open
Tuesday, March 14, 2023