Gold made another march to all-time highs on Thursdaysince concerns about the banking sector accelerated the search for the safe asset, which also saw its rebound supported by bets on a pause in rate hikes in the United States.
Spot gold rose 0.3% to $2,045.79 an ounce, after earlier rising to $2,072.19, just below the all-time high of $2,072.49 reached in 2020. US gold futures closed up 0.9% at $2,055.70.
“Overnight price movement associated with banking stress revealed that traders are willing to unfurl some of their gunpowder”said Daniel Ghali, a commodity strategist at TD Securities.
And while trend-following commodity trading advisors appear to be at their maximum long position sizes, “discretionary traders still have a horde of gunpowder to deploy, and this is the cohort we believe is participating in gold today”Ghali added.
Wall Street’s main indexes fell after PacWest’s decision to explore strategic options deepened concerns about the health of regional bankswhich offset the optimism sparked by the Federal Reserve after signaling a possible pause in interest rate hikes.
“The same flight to safety that pushed us over $2,000 is still in this market,” said Bob Haberkorn, senior market strategist at RJO Futures. Economic uncertainty and lower interest rates drive demand for the bullion, which does not yield interest.
The federal funds rate range is between 5% and 5.25%, although markets expect a cut in the cost of credit in the second half of the year. Among other precious metals, spot silver was up 1.4% at $25.94 an ounce, platinum was down 0.9% at $1,040.58 and palladium gained 2.5% to $1,458.34. .
Source: Ambito
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