Risk appetite pushes gold lower

Gold fell to $1950 per ounce

By Raed Alkhedr | @raedalkhedr | 27 March 2023

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  • A state of calm dominates global markets with the absence of important economic data.

  • The US dollar stabilizes near levels of 103.00.

  • Oil witnesses some recovery at the beginning of weekly trading.

Selling pressures dominate gold and push it down to $1950 per ounce

Gold prices declined to $1950 per ounce as investors showed an increased appetite for risk, which reduced the metal's appeal as a safe haven asset. This decline came amidst a backdrop of relative calm in global markets, as there was a lack of significant economic data. The decline was also attributed to a buyer of deposits and loans from Silicon Valley Bank, which helped European lender stocks to recover slightly. Gold saw a significant fall of 1.4% in the first session of the week after breaching the $2000 level last week.

The US dollar stabilizes in preparation for important economic data this week

The US dollar saw some stability and settled near the 103.00 level, in anticipation of important economic data scheduled for release later in the week, including the consumer spending index, which is the Fed's preferred measure of inflation. The US dollar experienced strong fluctuations last week after the Federal Reserve raised interest rates by a quarter of a percentage point. However, concerns about a recession due to the worsening banking crisis, and the bank's assurance of monitoring developments closely, put pressure on the dollar's performance. Despite a member of the Federal Reserve warning of a recession, officials said there were no indications of worsening financial pressures.

Oil rises again in the first session of the week

Oil prices rose in the first session of the week as investors assessed efforts by authorities to allay fears about the global banking system. Additionally, Russian President Vladimir Putin's announcement of plans to deploy tactical nuclear weapons in Belarus escalated tensions in Europe. WTI rose by 1% to approach the $70 per barrel level, while Brent oil rose to $75.70 per barrel. There were also reports of discussions about expanding emergency lending facilities, which gave hope of additional support for bank financing.