The price of gold neared US$2,000 per ounce at the end of Friday’s (March 17) trading session thanks in large part to ongoing uncertainty caused by the collapse of multiple American banks.
The precious metal closed Friday at US$1,988.18, representing a 3.6 percent increase for the day.
Gold’s approach to the coveted US$2,000 mark comes on the back of the collapses of Silicon Valley Bank (SVB) and Signature Bank, which has pushed investors to the perceived safer asset class throughout the week.
Gold began climbing at the end of last week as rumors of SVB’s struggles became reality, and continued through the collapse of Signature Bank on March 12.
The yellow metal first breached the US$2,000 level in mid-2020 due to the impact of the COVID-19 pandemic on the global economy. It also soared past that point in March of last year.
What happened to SVB?
SVB was known for doing business with startups, venture capitalists and tech firms. Its downfall has negatively affected the tech sector, which relies on serious lending, as well as the broader markets.
The bank was shut down by regulators on March 10 following a self-identified cash crunch. The US government officially stepped up to seize the bank two days later, and has now said those with accounts will have access to their funds.
SVB’s failure represents the second largest bank collapse in the US, while Signature is the third largest.
Investor takeaway
As another major financial event triggers momentum for gold, it will be crucial for investors to monitor their portfolios and adjust accordingly to the shockwaves going through the market.
Experts are now eyeing next week’s US Federal Reserve meeting for clues on what may be next for gold. Although a 25 basis point hike was previously widely expected, experts are now divided on what will happen.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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Image and article originally from investingnews.com. Read the original article here.