- Gold price rises driven by bulls as safe-haven demand soars.
- The acquisition of Credit Suisse by UBS only temporarily calms the markets.
- Gold gains ground on weaker dollar as bets on a forthcoming Fed rate hike fade.
the price of gold pauses its bull run after soaring on safe-haven demand, as fears of global bank contagion persist. At the time of writing this report, the XAU/USD It was trading at $1,969 a troy ounce, down 0.3% on the day. However, the precious metal is in a short-term uptrend, and the odds favor further gains.
Gold News: UBS Acquisition Fails to Calm Markets
A deal reached at the weekend for rival UBS to take over credit Suisse temporarily reassured investors in early European trading and stabilized sentiment, but the relief was temporary. Fears of greater banking stability continue to drive investors towards safe haven assets.
The failure of Credit Suisse and other banks, such as Silicon Valley Bank (SVB) and First Republic Bank before it, was triggered by a drying up of liquidity. Raising inflation and raising interest rates to combat it has caused many banks’ large holdings of government bonds to fall in value, reducing the value of their assets. This, combined with a drop in bank deposits, caused a contraction in bank liquidity.
Dollar loses momentum as Fed rate bets fall
The price of gold has also been favored by the drop in interest rate expectations. The US Federal Reserve was previously expected to continue raising rates aggressively at its next meeting on Wednesday March 22, however fears that even higher interest rates could exacerbate the banking crisis have reduced the likelihood from a 0.25% rise to just 59.8% according to CME’s FedWatch tool, a market gauge of the future federal funds rate. This is in contrast to the more than 81% probability of a month ago, when markets also envisioned a nearly 19% probability of a greater than 0.50% rise.
If the bets on future interest rate hikes by the Fed continue to decrease, this will have a positive impact on the price of gold, as it will reduce the opportunity cost of holding gold, which is a non-yielding asset.
Gold Price Technical Analysis
Gold price pauses after hitting a new yearly high of $2,009 early in the European session. The yellow metal remains in a short to medium-term uptrend that is expected to resume once the sideways consolidation ends.
The XAU/USD pair is channeling higher on the 4 hour chart and despite a pullback in the last few bars it is likely to continue. The RSI looks set to break out of the overbought and if the current 4 hour bar ends in a bearish tone, it will confirm a sell signal and the correction will likely continue to the downside. However, the support at the base of the channel around $1,950-60 is likely to provide a floor for the gold price from which it can rally and ride a rally back into the channel. The short-term trend remains up and only a decisive breakout and close within 4 hours below the lower channel line will turn the picture bearish.
From a technical point of view, the next bullish target is $2,069, the March 2022 high. On the other hand, a sudden pullback and a move below $1,887 would call into question the validity of the trend. bullish and would increase the chances of starting a new downtrend.
4 hour chart
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.