By Deep Kaushik Vakil
(Reuters) – Gold briefly broke above the key $2,000 level on Wednesday as fresh worries surrounding U.S. banking turmoil drove investors to the safe haven.
Spot gold edged up 0.1% to $1,999.83 per ounce by 10:11 a.m. EDT (14:11 GMT) after jumping as high as $2,009.32 earlier. U.S. gold futures rose 0.3% to $2,010.00.
First Republic Bank’s shares hit a record low after a report said the U.S. government was unwilling to intervene in the rescue process, adding to concerns about the troubled lender’s plans to turn around its business.
“That was the catalyst for gold prices to revisit slightly higher levels,” keeping U.S. yields lower, said Daniel Ghali, commodity strategist at TD Securities.
Benchmark U.S. Treasury yields hit a near two-week low, reducing the opportunity cost of holding zero-yield bullion, while the dollar shed 0.7%, supporting demand from overseas buyers. [USD/] [US/]
“Further weakness in yields should be positive for gold as long as $1,960 holds on the downside,” said Michael Hewson, chief market analyst at CMC Markets.
Traders were now focussed on U.S. quarterly gross domestic product data due on Thursday, followed by the core personal consumption expenditures index on Friday, the Fed’s preferred inflation gauge.
Markets had priced in about a 3-in-4 chance of the U.S. central bank raising rates by 25 basis points at its May 2-3 meeting.
Those odds were lower due to “resurgent fears that there is always more than one cockroach when it comes to the U.S. regional banking crisis,” Ghalli added.
Gold, which is considered a safe-haven investment during economic uncertainty, scaled an over one-year peak at $2,048.71 by mid-April as the U.S. banking crisis unfolded.
On the physical side, data showed Swiss gold exports to China rose in March while shipments to India and Turkey fell.
Spot silver fell 0.3% to $24.98 an ounce, platinum gained 0.6% to $1,092.30 and palladium rose 0.9% to $1,497.17.
Graphic: xau – https://fingfx.thomsonreuters.com/gfx/ce/xmvjkebampr/Pasted%20image%201682477141252.png
(Reporting by Deep Vakil and Ashitha Shivaprasad in Bengaluru; editing by Jonathan Oatis)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.