Gold prices at 5 week high in early trade

13 Mar 2023 , 09:16 AM

When the dollar sank on Monday and investors sought for safe-haven assets due to concerns over the worst U.S. bank failure since the 2008 financial crisis, gold prices increased to their highest level in more than five weeks.

Spot gold was up 0.5% at $1,877.30 per ounce, having earlier in the day reached its highest level since February 3 at $1,893.96. Futures for U.S. gold increased 0.8% to $1,882.10.

The dollar index fell by 0.4%, lowering the price of bullion for customers using other currencies.

U.S. officials intervened to contain the financial effects of Silicon Valley Bank’s bankruptcy, announcing that all clients would have access to their deposits starting on Monday.

Silicon Valley Bank was shut down on Friday by California banking authorities, who also named the Federal Deposit Insurance Corporation (FDIC) as receiver for the eventual sale of its assets.

On Sunday, state regulators took down New York-based Signature Bank, just two days after Silicon Valley Bank was shut down by Californian authorities.

The U.S. economy added jobs quickly in February, according to data released on Friday, but monthly wage growth slowed and the unemployment rate increased, suggesting some easing of the labor market. As a result, financial markets reduced their expectations that the Federal Reserve would raise interest rates by half a percentage point this month.

Spot prices for palladium increased by 0.5% to $1,385.56, platinum increased by 0.3% to $961.87, and silver increased by 0.6% to $20.63 per ounce.

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