Gold hits over 5-week high on weaker dollar, bank worries

GOLD prices rose on Monday (Mar 13) to their highest in more than five weeks as the dollar weakened, while jitters over the largest US bank failure since the 2008 financial crisis drove investors to the safe-haven asset.

Spot gold was up 0.5 per cent at US$1,877.30 per ounce, as of 0051 GMT, after hitting its highest since Feb 3 earlier in the session at US$1,893.96. US gold futures gained 0.8 per cent to US$1,882.10.

The dollar index was down 0.4 per cent, making bullion cheaper for buyers holding other currencies.

US officials stepped in to stem financial fallout from the failure of tech startup-focused Silicon Valley Bank, saying that all customers would have access to their deposits starting on Monday.

California banking regulators closed Silicon Valley Bank on Friday and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver for later disposition of its assets.

State regulators closed New York-based Signature Bank on Sunday, just two days after California authorities shuttered Silicon Valley Bank.

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Data on Friday showed the US economy added jobs at a brisk clip in February, but monthly wage growth slowed and the unemployment rate rose, pointing to some labour market loosening and prompting financial markets to dial back expectations that the Federal Reserve would raise interest rates by half a percentage point this month.

Gold is considered a hedge against economic uncertainties, and tends to gain on expectations of lower interest rates which reduce the opportunity cost of holding non-yielding bullion.

Spot silver added 0.6 per cent at US$20.63 per ounce, platinum was 0.3 per cent higher at US$961.87 and palladium rose 0.5 per cent to US$1,385.56. REUTERS