Gold prices rallied by more than 1% on Monday following fears of a fallout from the largest U.S. bank failure since the 2008 financial crises.
Spot gold was up 0.6% at $1,878.54 per ounce, as of 0631 GMT. Earlier in the session, bullion hit its highest since Feb. 3 at $1,893.96.
Gold’s rally follows on from Friday’s bullish momentum where gold prices rallied by 2% after California regulators closed tech startup focused Silicon Valley Bank (SVB). The sharp fall if the dollar index provided a tailwind for gold prices. Moreover, revised rates hike expectations for the Fed to be less aggressive have supported gold prices. Goldman Sachs said on Sunday it no longer expected the Fed to deliver a hike on March 22. Goldman had previously expected a 25 basis-point hike in March. On the other hand, Morgan Stanley continues to look for a 25 basis-point hike during the March FOMC meeting.
On a technical aspect, gold price has broken the 1875 barrier. Next resistance levels are 1900 followed by 1926. A close above 1875 will help to sustain the bullish momentum. Support levels are at 1864 and 1840. Only a close below 1836 can renew bear trend forces.
Gold prices in the UAE for the day are as follows:
24 Carat 227.75
22 Carat 211.00
21 Carat 204.25
18 Carat 175.00