Gold has slipped back below $2,000 an ounce but still remains near its highest level in a year as investors flooded to the ultimate haven asset amid the current banking crisis.
Today’s slight decline reflects that the prospect of a widespread collapse of the financial sector has receded with US Treasury Secretary Janet Yellen seeking to calm the situation by stating that the country’s regulators were “prepared to take additional actions if warranted” to protect bank deposits.
Physical gold’s lack of counterparty risk has come to the fore in the last couple of weeks after a series of banking failures and near misses in both the US and Europe have left people worried how safe their money held in those institutions truly was.
The fact that gold has continued to hold these elevated levels in a week that a whole host of central banks have increased their benchmark interest rates, including the Federal Reserve and the Bank of England, points to the strength of support from haven-seeking investors for the precious metal.
How long it holds near $2,000 will be determined by how contained the current banking crisis proves to be and if confidence can return to the investment community then gold is likely to drift quite quickly back towards $1,900.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
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