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Gold rises to 1-year high as demand for safe assets grows

21.03.23 00:00
The price of gold surpassed $2,000 on Monday, hitting its highest level in a year as risk sentiment in global financial markets increased amid a potential banking crisis.

Gold price climbed to as high as $2,014.90 per ounce earlier, reaching its highest level since March 10, 2022, according to official figures.

Investors have been rushing to safe haven assets such as gold due to concerns over the spillover effect of the banking crisis.

"The US Federal Reserve is expected not to deliver an aggressive rate hike amid these developments and gold is benefiting from falling rates," Enver Erkan, the chief economist at Dinamik Yatirim, told Anadolu.

"We should also consider the market stress. Safe instruments have been re-evaluated. Risk aversion is also positive for gold," Erkan said.

Swiss banking giant UBS on Sunday announced the takeover of troubled lender Credit Suisse for around 3 billion Swiss francs ($3.25 billion) with the backing of Swiss authorities. However, the deal wiped out 16 billion francs ($17.3 billion) in Credit Suisse AT1 bonds.

Therefore, major central banks are putting efforts to boost dollar liquidity through swap arrangements, AA reports.