Gold topped $2,000 to a one-year high, then pulled back and closed lower

Gold topped ,000 to a one-year high, then pulled back and closed lower

Gold, one of the assets considered a refuge in times of instability, exceeded US$2,000 per ounce on Monday, March 20.and approached his August 2020 record (in the US$2,075), although with the passing of the hours it deflated and closed the day in low.

Gold prices fell from one-year highs in a volatile session, while stocks and Treasury yields rallied amid efforts by central banks to shore up confidence in the financial sector.

Spot gold fell 0.8% to $1,972.19 an ounce, after losing more than 1%, while US gold futures gained 0.2% to $1,976.80.

Earlier in the session, Gold metal prices rose 1%, to their highest level since March 2022, to $2,009.59just below the record set during the start of the COVID-19 pandemic.

“While emergency efforts are being made (…) it is now being seen that this is far from over. Shelter flows are going to be, in all fairness, the key operation,” said Edward Moya, Principal Market Analyst at OANDA.

In an effort to help the banking sector, major central banks acted on Sunday to bolster cash flow around the world.

The price of gold accumulates a rise of more than 100 dollars since the bankruptcy of the American bank Silicon Valley at the beginning of the month.

Gold is seen as a safe haven asset in times of financial uncertainty, while lower rates reduce the opportunity cost of holding bullion, which does not earn interest.

In other precious metals, spot silver dipped 0.6% to $22.46 an ounce; platinum rose 1.1% to $981.41; and palladium lost 1.3% to $1,400.35.

Central banks announcement

The Federal Reserve of the United States (Fed), the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank announced this Sunday a coordinated action to improve the provision of liquidity through permanent agreements of exchange lines (liquidity swaps), in US dollars, according to the agency.

In an official statement, issued in Washington, the Fed and its peers said the move was taken “to improve the effectiveness of swap lines in providing US dollar financing.”

“Central banks that currently offer US dollar trading have agreed to increase the frequency of 7-day trading from weekly to daily,” the joint document states.

Source: Ambito

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