On Friday, gold futures closed at an 11-month high and their biggest weekly gain in nearly three years as concerns about the global banking crisis spurred investors to buy gold. In addition, the depreciation of the dollar has also boosted the gold market.
Gold futures rose by $50.50 or 2.63% to close at $1,973.50/ounce, marking a 5.7% increase for the week, while silver futures rose 77 cents or 3.55% to close at $22.462/ounce. Platinum futures rose by $1.50 or 0.15% to close at $978.60/ounce. However, palladium futures were down $23.20 or 1.7% at $1,386.10/ounce.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.67% to 103.7153, making gold contracts cheaper for investors holding other currencies.
The global banking crisis continues to hurt investor confidence, encouraging them to buy gold as a safe haven investment. Furthermore, market expectations that The Federal Reserve (Fed) may end its cycle of interest rate hikes after rising 0.25% once more next week also weighed down the dollar index and drove up the gold contract.
The sluggish US economic data release on Friday further boosted gold futures. The US Federal Reserve (Fed) reported that US industrial production remained stable in February, below market expectations that it may increase by 0.2%. A survey by the University of Michigan also indicated that consumer sentiment fell for the first time in four months, dropping to 63.4 in March from 67.0 in February, and below analysts’ expectations of 67.0.
In summary, gold prices rose due to concerns about the global banking crisis, the weakening of the US dollar, and market expectations that the Federal Reserve may end its interest rate hikes cycle, while sluggish US economic data also supported the upward trend in gold futures.
The Spot Market is Closed
Saturday, March 18, 2023