Gold prices dipped on Thursday after investors cashed in profits following a six-week high, while market concerns over a possible banking crisis and uncertainty over monetary policy kept the yellow metal’s safe haven appeal intact. Swiss bank Credit Suisse Group AG’s announcement that it would exercise a $54 billion credit facility from the Swiss National Bank to strengthen its liquidity eased some worries over a potential banking crisis.
The precious metal’s safe-haven status has attracted investors looking to hedge against economic and geopolitical uncertainties. Despite the slight dip in prices, gold is still up by around 8% year-to-date. The ongoing concerns surrounding the COVID-19 pandemic and its impact on global markets continue to contribute to the precious metal’s appeal.
Investors are also keeping a close watch on monetary policy. The US Federal Reserve’s recent indication of its intention to raise interest rates to combat inflation has led to some speculation about the potential impact on gold prices. Additionally, ongoing concerns surrounding the pandemic and its potential impact on the economy continue to drive uncertainty.
In light of these factors, gold prices are expected to remain relatively stable in the near term. However, investors will likely continue to monitor developments surrounding the COVID-19 pandemic, monetary policy, and potential banking crises to determine the metal’s future performance.