- Gold price is recovering from a daily low around $1,885 on renewed risk aversion.
- Traditional safe-haven assets like the USD, JPY and gold benefit from risk aversion.
- Credit Suisse shares fall as much as 10.5% on Wednesday, fear in the banking sector.
The price of gold (XAU/USD) reverses an initial dip to a daily low around the $1,885 level and rallies strongly during the European session above the $1,900 level. At time of writing, XAU/USD is trading at the daily high zone at $1,909, up 0.25% on the day.
A increased risk aversion is benefiting traditional safe-haven assets such as the USD, the JPY and the gold. At the time of writing, the index S&P 500 loses more than 1.60% on the day below 3,890 points amid renewed fears in global financial markets.
He US dollar strengthens against all currencies except against the Japanese yen. At the time of writing, EUR/USD is down over 120 pips from its daily highs and GBP/USD is down over 100 pips.
The reason for this renewed risk aversion seems to be caused by Credit Suisse shares have tumbled on Wednesday, falling as much as 10.5% to a new all-time low.while its biggest investor said that could not provide the Swiss bank with further financial assistance. “We cannot because we would exceed 10%. It’s a regulatory issue“Saudi National Bank Chairman Ammar Al Khudairy said on Wednesday.
This is causing fear in banking sector stocks in Europe and adds to concerns about banking problems in the US with last week’s fall in the Silicon Valley Bank and the SignatureBank.
Market participants are now looking to the US economic calendar, with the release of the Producer Price Index (PPI), the monthly Retail Sales figures and the Empire State Manufacturing Index later in the American session, although this data is unlikely to generate a big move in gold prices.
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.
