Gold ends in red as policymakers bid to calm bank fears

Gold closed in the red today, March 16, amid cautious optimism about the global banking system that recently triggered major government interventions to protect the financial system against two of the biggest bank failures in US history.

Credit Suisse Group AG announced today its intention to borrow up to CHF 50 billion ($54 billion) from the Swiss National Bank plans and repurchase about $3 billion of its debt, as executives and government officials plot the next steps for the troubled lender.

Further, authorities are arranging with big US banks to inject $30 billion in deposits into First Republic Bank, swooping in to rescue the lender caught up in a widening crisis fueled by the US banking system’s ongoing chaos over the past week.

Elsewhere, the European Central Bank (ECB) decided today on a 50-basis-point (bp) increase in the deposit rate to 3%, as the fight against inflation persists in the Eurozone.

On the other hand, JP Morgan analysts expected gold prices to skyrocket to $2,000 an ounce this year, Reuters reported, citing a research note from the financial services provider.

In terms of trading, gold for April delivery contracted by 0.40%, or $8.30, to end at $1,923 an ounce.

Similarly, the US dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.10% to 104.51 points at 8:49 pm Makkah time.