Gold Surges As SVB Fallout Spurs Rush To The Haven Asset
Bullion advanced 2.4%, bringing its gains this month to 4.8%, the most since January, as the fallout from SVB’s collapse combined with a decline in the dollar index to drive up prices.
(Bloomberg) -- Gold jumped the most in a day’s trading since November as Silicon Valley Bank’s collapse led investors to seek haven in bullion and concerns surrounding the financial industry mount.
Bullion advanced 2.4%, bringing its gains this month to 4.8%, the most since January, as the fallout from SVB’s collapse combined with a decline in the dollar index to drive up prices. It’s a rapid turnaround for gold, which in the year prior to last week’s meltdown of SVB was down 12%. The precious metal has now jumped above its 50-day moving average, signaling a change in momentum.
A likely combination of increased long positioning and the covering of short exposure drove gold up, said Bart Melek, head of commodity strategy at TD Securities in a note.
“Gold market should lose momentum once it settles at a stable technical level and give up some of its recent gains back into next week, as there is still a risk the Fed continues to champion a hawkish stance, should next week’s CPI report not show any easing and economic data remain firm,” Melek said.
Read More: Copper, Gold Tells Us Market Thinks Fed’s Job Got Harder
Spot gold added 2.4% to $1,914.05 an ounce as of 4:20 p.m. in New York. It has climbed roughly 5% since the March 8 settlement as concern over SVB grew.
Copper rose 0.8% to settle at $8,950 a metric ton in London. Aluminum rose 0.9% with other base metals also recording gains.
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