ALBAWABA — Gold prices edged higher on Friday as troubles at Swiss lender Credit Suisse renewed fears of a worldwide banking crisis and the European Central Bank raising its interest rate for the sixth straight meeting pushed the safe haven precious metal.
"Markets started the day in a better mood, as governments and central banks are taking steps to ensure banks’ credibility and prevent a steeper crisis. Relief came after the Swiss National Bank and the Swiss Financial Market Supervisory Authority announced late Wednesday that Credit Suisse met the capital requirements imposed on banks and that they would provide liquidity, if necessary," Marc Despallieres, chief strategy and trading officer at Vantage, told Live Mint.
"ECB announced its monetary policy decision, which was widely anticipated, the central hiked rates by 50 basis points," Despallieres added.
On the international market, spot gold was up 0.71 percent at $1,936.70 a troy ounce, at 11:01 a.m. United Arab Emirates time.
The precious metal’s prices also went up in the U.A.E. in line with global rates on Friday.
The Dubai Jewelry Group data showed 24K gold price opening higher at 233.75 dirhams per gram as compared to yesterday’s closing at Dh233.25 per gram.
Similarly, 22K, 21K and 18K also opened higher at Dh216.50, Dh209.50 and Dh179.50 per gram, respectively, closing the day before at Dh216, Dh209 and 179.25 respectively.
"Gold market should lose momentum once it settles at a stable technical level and give up some of its recent gains back into next week, as there is still a risk the Fed continues to champion a hawkish stance, should next week’s CPI report not show any easing and economic data remain firm," Bart Melek, head of commodity strategy at TD Securities, wrote in a note, adding that a likely combination of increased long positioning and the covering of short exposure drove gold up.
