This post was originally published on this site
Gold futures briefly toped $2,000 an ounce on Friday, seesawing between losses and gains to cap off a quarter that saw prices for the metal climb by more than 9%.
The precious metal has benefited this quarter from expectations that Federal Reserve interest-rate hikes might soon come to an end, while a crisis of confidence in U.S. regional banks and some major European lenders helped bolster the yellow metal thanks to safe-haven flows.
Price action
-
The June gold contract
GC00,
-0.20% GCM23,
-0.20%
climbed by 40 cents, or less than 0.1%, to $1,998.10 per ounce on Comex after trading as high as $2,005.50. Prices, based on the most active contracts, traded nearly 9% higher for the month and eyed a more than 9% rise for the quarter after settling Thursday at their highest since March 10, 2022, FactSet data show. -
Silver for May delivery
SI00,
+0.65% SIK23,
+0.65%
rose 24.1 cents, or 1%, to $24.23 per ounce. -
Palladium for June delivery
PAM23,
+0.88%
edged up by 40 cents, or less than 0.1%, to $1,464 per ounce, while platinum for July
PLN23,
+0.66%
fell by $1, or 0.1%, to $995.90 per ounce. -
Copper for May delivery
HGK23,
-0.22%
traded at $4.0885 per pound, down by a fraction of a cent.
Market drivers
Gold prices moved higher for the month “primarily on safe-haven investment demand following the failure of Silicon Valley Bank and Signature Bank, and the almost-failures of First Republic Bank
FRC,
and Credit Suisse
CS,
” Jeff Klearman, portfolio manager at GraniteShares, which runs the GraniteShares Gold Trust
BAR,
told MarketWatch. “The flight-to-quality market sentiment led to sharply lower Treasury rates, also bolstering gold prices.”
While banking sector concerns have recently diminished, expectations that the Federal Reserve will pause its interest-rate hikes and the possibility of the Fed lowering rates this year have also increased, he said. “These expectations have been mainly powered by growing expectations of tighter credit conditions as a result of regional banks restricting lending activity in light of their current situation,” he noted.
This set of expectations has also supported gold prices as Treasury rates — off their flight-quality lows — “continue to be pressured lower and the U.S. dollar weakens,” said Klearman.
On Friday, U.S. government data showed that the cost of U.S. goods and services rose by a milder 0.3% in February. Prices had climbed by a sharp 0.6% in January, based on the PCE index.
Inflation remains a concern but is well off its recent highs and is seemingly trending lower, Klearman said. That supports expectations of a less aggressive Fed monetary policy, pressuring Treasury rates and the dollar, which is supportive for gold.
The yellow metal is poised to log its largest quarterly percentage gain since the second quarter of 2020 and its biggest one-month percentage rise since July 2020, according to Dow Jones Market Data.
The most active June contract touched highs above $2,000 Friday. The precious metal, however, continues to pause just below that key level as “investors try to decide whether to push through the big round number or not,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “With the banking situation stabilizing, gold has levelled off for now — but this could change depending on how developments evolve from here.”
