- On Monday, the price of gold reached its top just above $2,000 before bulls started to benefit.
- Although it is still far from its all-time highs, silver is following the same pattern.
- The global banking crisis has helped precious metal prices.
As the financial markets attempt to decompress from the extreme stress experienced over the past several days, precious metals are continuing the pullback they started on Monday. The price of gold (XAU/USD) has dropped from a peak above $2,000 early on Monday to be trading below $1,970 at the time of writing. A relative monthly high below $23 was reached on Monday, and since then, there has been a 1% retracement, making silver price activity (XAG/USD) a little bit quieter.
The agreement between UBS and Credit Suisse to merge and concerted central bank efforts to pump liquidity into the system have helped to moderate the strong risk-off sentiment that has been present since Silicon Valley Bank’s demise.
The Federal Reserve’s decision will determine how the price of gold moves moving forward.
Yet tensions are far from over, as the Federal Reserve’s interest rate decision on Wednesday will be critical in determining how the world’s largest central bank views the tension between fighting persistent inflation and easing the strain on the global financial system.
According to institutional market experts, there is still more upward potential for precious metals, especially Gold, as any dovish cues in the FOMC projections (also known as the dot plot) will boost the price of the brilliant metal.
