Due to the fall of Silicon Valley Bank (SVB) and the crisis at Signature Bank, people continued to buy gold on Monday morning as a safe haven for the third session in a row. Gold future contract for the month of April 2023 opened up at 56,667 per 10 gm, but profit-taking caused the price to drop to a low of 56,412 per 10 gm during the day. The precious bullion metal, however, stayed higher than its Friday close price of 56,150. On the international spot market, the price of gold has gone up by 0.65% and is now around $1,880 per ounce.
Experts in the commodity market say that the gold rate has immediate support at 55,700 per 10 gm, while it faces a barrier at 57,500 per 10 gm. They said that the price of gold has been going up since the SVB failed, and that trend has gotten stronger since the news that Signature Bank failed. After the Silicon Valley Bank crisis, data on US non-farm payrolls helped the price of gold go up over the weekend. Experts said that gold prices are likely to keep going up because people want to buy it as a safe haven, and it could reach $1,920 per ounce before the US CPI data comes out this week.
After the SVB crisis, Signature Bank failed.
Assuming that people will continue to buy gold as a safe haven, Vice President of Research at Motilal Oswal, Amit Sajeja, said, “Due to a string of bank failures in the US, the gold price is going up right now. The news about the Silicon Valley Bank crisis, which got worse after the signature Bank failed, made people want to buy gold as a safe haven on Thursday. The rest of the work was done by helpful US non-farm payroll data, which helped the gold price rally even more.”
US dollar rate in focus
Gold investors were told to keep an eye on the Dollar Index. Vice President of Research at IIFL Securities, Anuj Gupta, said, “After the news that Silicon Valley Bank was going bankrupt, the value of the US dollar fell from a three-month high. The Dollar Index has gone down from near 106 to 103, which is helping the price of gold go up. As the US banking crisis has put most assets at risk, gold has once again started to be seen as a safe haven. But any pullback rally is likely to cause gold prices to start taking profits. So, it’s important to keep an eye on the US dollar rates.”
Amit Sajeja from Motilal Oswal said that the upcoming US CPI data will be very important for how gold prices move in the future. He said that gold went from $1,815 to $1,880 in just three trading sessions, so profit-taking is likely to happen between $1,880 and $1,885. But after taking profits, $1,850 to $1,860 would be a good range for buying with a short-term goal of $1,920 per ounce.
“Gold prices in India are expected to go up from around 56,200 per 10 gm to 57,500 per 10 gm in the near future. So, someone can buy around 56,200 with a stop loss at 55,700 per 10 gm for a short-term goal of 57,500 “said Amit Sajeja. But a Motilal Oswal expert told gold investors to take their profits before this week’s US CPI data was released, because the precious bullion metal could move in any direction after the data was released.
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