Posted 20th Mart 2023

Gold Price News: Gold Surges Near $2,000 as Investors Seek Out Haven

gold bullion bar stack

Gold is closing in on $2,000 an ounce as the continued fallout from the banking sector has seen a flood of money to gold with its safe haven qualities having endured through centuries of previous stock market collapses. 

UBS’ hastily agreed deal to buy Credit Suisse over the weekend should have a calming effect on markets but after the collapse of three US banks and deposit help with a fourth one, gold will remain the asset of choice until investors have more confidence that no other financial institutions are at risk. 

Gold has come into its own amid the chaos in the banking sector with its lack of counterparty risk making it very attractive at a time when large depositors in the banks that have failed have been left concerned with how much of their money they will be able to get back. The tangible nature of physical gold suddenly becomes highly desired compared with money held on account. 

How much further gold can gain will largely be determined by how many more financial institutions have to be bailed out or fail in the coming days and also by the interest rate decision of the Federal Reserve when the committee meets later this week. 

If the Fed holds its nerve and increases rates by another 25 basis points, then that may temper gold’s rally; however, a pause by the US central bank will open up the chance for continued gold gains and could see it challenge the highs of last year.

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