(Kitco News) The gold market posted an unexpected weekly gain on potential contagion risks from the Silicon Valley Bank (SVB) meltdown.
The precious metal is once again the safe-have trade, with investors rushing in after Friday’s SVB collapse. California banking regulators moved quickly to close SVB Financial Group in what is the largest bank failure since the financial crisis.
SVB was one of the leading technology financiers, and its failure showcases potential unintended consequences of the aggressive hiking cycle pursued by the Federal Reserve in its fight against inflation, according to analysts. The fear is that the startup-focused lender’s troubles could ripple through the rest of the global markets.
“Gold is seeing safe-haven flows on these financial instability concerns,” OANDA senior market analyst Edward Moya told Kitco News. “Startups and debt refinancing are some of the biggest financial risks that traders are analyzing.”
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