The yellow metal is taking advantage of the turbulence in the banking sector to play its classic role as a safe haven for investors. This week, it crossed the symbolic bar of 2,000 dollars an ounce, and could appreciate if the rise in rates slows down during the year, some seeing it reaching 2,050 dollars. It is still supported by central bank purchases.

The misfortune of the American and Swiss banks is obviously the happiness of gold. After the spectacular bankruptcies of three banks on the other side of the Atlantic, including Silicon Valley Bank (SVB) in California, and the collapse on this side of the Atlantic of the venerable Credit Suisse acquired by its compatriot UBS, investors turned into gold, fearing a general banking crisis.

On the New York precious metals futures market on Wednesday, the price of an ounce (31.1 grams) ended the session up 1.70% to 1,982.8 dollars. Monday morning in session, it even traded up to 2,009 dollars. Since its last low point, reached at the end of October 2022, its price has risen by almost 33%.

The misfortune of the American and Swiss banks is obviously the happiness of gold. After the spectacular bankruptcies of three banks on the other side of the Atlantic, including Silicon Valley Bank (SVB) in California, and the collapse on this side of the Atlantic of the venerable Credit Suisse acquired by its compatriot UBS, investors turned into gold, fearing a general banking crisis.

On the New York precious metals futures market on Wednesday, the price of an ounce (31.1 grams) ended the session up 1.70% to 1,982.8 dollars. Monday morning in session, it even traded up to 2,009 dollars. Since its last low point, reached at the end of October 2022, its price has risen by almost 33%.

I have not considered or discussed any comprehensive insurance or guarantee protection for all deposits,” she said, wanting to rule out moral hazard, which characterizes excessive risk taking by banking establishments convinced that they will always be saved by the public authorities.

The rise in rates will also be a factor influencing the evolution of the precious metal, a higher bond yield is unfavorable to the yellow metal. “Recent gold price action suggests that the pace and depth of the rate cycle may be slowing, and the Fed’s decision to hike rates by 0.25 points sends the same signal,” he said. Thursday Joe Cavatoni, the World Gold Council’s (WGC) strategist for North America, in an interview with Market Watch.

However, it remains to be seen when this will happen. The yellow metal also benefits from a floor price thanks to central bank purchases, the volume of which reached a historic record last year, with 1,135.7 tonnes against 450.1 tonnes in 2021, an annual increase of 152%, the largest annual volume since 1950, according to WGC data. And despite the Western embargo, the Russian Central Bank, quoted by the Bloomberg agency, announced on Wednesday that it had increased its gold reserves “by 1,000,000 ounces” last year, or some 31 tons, bringing its total volume to 2,330 tons.

In 2023, this volume should not be as high, estimates the WGC, in particular due to the effects of the rise in rates decided by the monetary institutions which can arbitrate their foreign exchange reserves in favor of currencies or bonds.

Central bank purchases up 16% in January
In the meantime, “the central bank of Singapore announced the purchase in January of more than 1.4 million ounces of gold, the equivalent of 44.62 tons of yellow metal”, notes Laurent Schwartz, CEO of Comptoir National gold. This represents a 30% increase in the reserves of the Central Bank of Singapore, which now has 198 tonnes in its coffers. “Is the city-country very active in terms of international trade also seeking to de-dollarize and diversify its reserves? asks the expert.

In this case, there is a margin. The central bank has nearly $291 billion in reserves, of which about $4.5 billion is now invested in yellow metal, or just 1.5%. Singapore is not the only buyer. In January, Turkey, China and Kazakhstan were also buyers.

In the first month of the year, 31 additional tonnes were purchased net by central banks according to the WGC count, i.e. 16% more than in December 2022. A good way to start the year for the yellow metal .