Gold Surges to $2,000 per Ounce

Is it possible for gold to continue rising?

20 March 2023

  • Gold rebounded from $2,000 an ounce

  • Oil witnessed some recovery during today's trading

Gold prices surge to $2,000 per ounce as global uncertainty persists

Global uncertainty and risk aversion have continued to dominate the markets, leading to a surge in gold prices to $2,000 an ounce for the first time since April 2022. However, concerns about the possibility of bankruptcy contagion and the likelihood of the US Federal Reserve maintaining interest rates may sustain demand for gold in the coming period.

Oil prices experience downward pressure due to concerns over global demand decline

Meanwhile, fears of a decline in global demand have put significant pressure on oil prices, leading to sharp declines at the beginning of the weekly trading. Despite some recovery, WTI fell to $64.30 a barrel, while global benchmark Brent also dropped below $71, following a negative performance last week. Goldman Sachs no longer predicts oil prices reaching $100 this year, as investor concerns about a global banking crisis have decreased appetite for risk assets, including commodities.

Goldman Sachs no longer sees Oil reaching $100 level this year

The decline in oil prices is attributed to the decrease in investor appetite for risk assets, including commodities, due to concerns about the global banking crisis. WTI fell to almost $65 per barrel, while the global benchmark Brent dropped below $71, reflecting a negative performance of 12% last week, the lowest since December 2021. The recent offer of UBS Group AG to purchase Credit Suisse for one billion dollars and the coordinated action of the Federal Reserve and five other central banks to enhance liquidity in US dollar swaps also affected oil prices. Although WTI remained in a tight range since the beginning of 2023, crude broke lower due to the banking crisis and concerns about a global slowdown, raising the possibility of OPEC+ intervention. However, some observers suggest that the group may remain on the sidelines for now.