Gold edges higher on softer dollar; banking optimism limits appeal

GOLD prices edged up on Tuesday (Mar 28) as the US dollar eased, although an improvement in risk appetite after efforts by regulators to contain worries over the global banking system limited the safe-haven metal’s appeal.

Spot gold was up 0.1 per cent at US$1,958.85 per ounce, as of 0048 GMT. US gold futures rose 0.3 per cent to US$1,959.30.

The dollar index eased 0.1 per cent, making bullion more affordable for buyers holding other currencies.

Gold prices slipped more than 1 per cent on Monday as investors scaled back on safe-haven trading in favour of riskier assets after First Citizens BancShares said it would take on the deposits and loans of failed Silicon Valley Bank.

Bank of England governor Andrew Bailey signalled on Monday that interest rate-setters would focus on fighting inflation and would not be swayed unduly by worries about the health of the global banking system.

The US Federal Reserve is “still learning” how much impact its interest rate increases have had on the economy and inflation, Federal Reserve governor Philip Jefferson said on Monday.

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Gold eases on steady dollar; market focus on banking risks

Markets are pricing in a nearly 60 per cent chance of the Fed standing pat on interest rates in its May meeting, according to the CME FedWatch tool.

Higher interest rates tend to discourage investment in non-yielding bullion.

Spot silver edged 0.1 per cent higher to US$23.11 per ounce, platinum rose 0.4 per cent to US$975.13 and palladium was up 0.5 per cent at US$1,414.99. REUTERS