By Yusuf Khan


Gold prices have pushed past $2,000 a troy ounce for the first time since March of last year as the crisis in banking continues to push investors toward safe havens.

Gold futures on Monday morning were sitting at $2,008 an ounce - the highest since March 2022 when Russia's invasion of Ukraine the previous month spurred investors toward the precious metal, according to data from FactSet.

The recent turmoil within banking has, for the time being, made gold more attractive to investors, analysts said.

Fitch Solutions raised its average price for the year to $1,950 an ounce from $1,850 an ounce and said the turmoil had triggered a rush to safety for investors fearing recession.

"We believe the mounting of global financial instability is likely to drive gold prices toward its all time high of $2,075 an ounce in the coming weeks," Fitch said in a note, though it added there is significant resistance around that level with the strength of the dollar acting as a headwind toward gold.

The collapse of Silicon Valley Bank and subsequent turmoil on both sides of the Atlantic hasn't as of yet led to dollar prices surging, albeit they are still strong, Commonwealth Bank of Australia's Vivek Dhar noted.

During the 2008 financial crisis gold initially rose when Lehman Brothers collapsed, while the dollar weakened, Mr. Dhar said. "It didn't take long before the U.S. dollar started rallying aggressively as global financial stability risks escalated. Gold initially held on to its gains before falling as the rising U.S. dollar eventually weighed on gold," he said.

Standard Chartered is still expecting a 25 basis point hike from the Federal Reserve when the central bank next meets to decide on its key interest rate, the U.K. bank's analyst Suki Cooper said in a note. Late on Sunday, six global central banks including the Fed announced liquidity measures to shore up the banking sector.

"Our economists think FOMC members will express confidence that policies put in place will help calm financial markets, as well as making it clear that they stand ready to provide additional support if needed," Ms. Cooper said.


Write to Yusuf Khan at yusuf.khan@wsj.com


(END) Dow Jones Newswires

03-20-23 0508ET