Gold surges as US banking crisis rages – RT Business News

The precious metal remains a safe haven for many investors in times of uncertainty

Gold prices continued to climb on Friday as investors turn to safe-haven assets amid fears of further market turmoil triggered by the banking crisis in the United States and Europe.

The precious metal extended its gains from Monday, when it opened trading at $1,879 an ounce to $1,936 on Friday afternoon, after starting the day at $1,921.

Investors traditionally turn to gold during times of market uncertainty to hedge risk. Throughout history, the precious metal has been considered a reliable investment instrument during times of economic instability, stock market crashes, military conflicts and pandemics.

Investors are now stepping up their purchases of gold, seeking protection from the contagion that appears to be affecting the US banking sector.

“The question on traders’ lips now is whether the fear is entrenched, meaning yields could cushion declines as the dust settles, which could be a near-term headwind for gold, or if the turmoil is just beginning. Time will tell, but further fallout could see gold move closer to February highs around $1,960, with $2,000 then above that,” Craig Erlam, senior market analyst at Oanda, said.

Major US banks are teaming up to pump $30 billion into struggling First Republic Bank amid a growing banking crisis triggered by the collapse of two other midsize lenders, SVB and Signature Bank.

Bank of America, Citigroup, JPMorgan Chase and Wells Fargo said they would each make an uninsured deposit of $5 billion, while Goldman Sachs and Morgan Stanley would each deposit $2.5 billion. BNY-Mellon, PNC Bank, State Street, Truist and US Bank each pledged $1 billion.

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