2023-05-02 19:31:00
© Archyde.com. Gold bars in a photo from the Archyde.com archive.
(Archyde.com) – Gold extended its gains on Tuesday, on track to achieve its largest daily rise in a month, as bond yields fell on renewed fears of a widening crisis in the US banking sector, ahead of the Federal Reserve’s widely expected decision to raise interest rates.
It jumped 1.5 percent to 2012.19 an ounce by 1800 GMT, following earlier touching its highest level since April 17 at 2019.37.
US gold futures rose 1.6 percent, to settle at $2,023.30.
“Banking concerns have returned … to really remove this risk that the Federal Reserve may consider a rate hike in June,” said Edward Moya, senior market analyst at OANDA.
US regional bank stocks fell and Treasury yields fell as the collapse of First Republic raised investor concerns regarding the safety of other mid-sized banks.
On Monday, regulators announced the seizure and sale of First Republic’s assets to JP Morgan Bank in a deal aimed at tackling the biggest US banking crisis since the 2008 financial crisis.
Meanwhile, the Federal Open Market Committee started its two-day meeting, during which it is expected to raise interest rates by 25 basis points.
Markets expect a 15 percent rate cut in June and see no chance of another hike.
While gold is a hedge once morest economic uncertainty, higher interest rates hurt demand for non-yielding assets such as the yellow metal.
And for other precious metals, it rose in spot transactions by 1.1 percent, to $ 25.25 an ounce. Platinum rose 1.2% to $1,061.99, while it fell 1.5% to $1,429.27.
(Prepared by Mahmoud Salama, Amira Zahran and Ali Khafaji for the Arabic Bulletin)
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