(Kitco News) Investors are embracing the gold market amid the quickly escalating banking contagion fears. Strong demand for the precious metal is keeping prices at 5-week highs Wednesday.
The banking sector roiled Wednesday as shares of Credit Suisse — a Swiss bank with extensive U.S. and global operations — tumbled 31% before paring back declines to 20%. This was the biggest one-day selloff on record and managed to drag European and U.S. stocks down.
With the global market rout stoking fears of a more significant fallout, gold is trading above $1,900 an ounce and is up 5.5% since the start of the year. April Comex gold futures were last at $1,941.60 an ounce, up 1.6% on the day.
“We expect this banking turmoil to reinvigorate investor demand over the longer term,” said ANZ senior commodity strategist Daniel Hynes. Demand for the precious metal is growing, with more than 300,000 ounces added to physically-backed gold ETFs in the last trading session, according to Bloomberg data. This marked the largest increase since June.