Gold ends 1.5% lower as banking woes ease

Gold prices fell sharply at settlement today, March 27, as efforts by authorities to rein in concerns over the world’s banking system seemingly fueled optimism and calmed investors’ angst.

Markets took a positive tone on news that First Citizens is taking over the solvent parts of Silicon Valley Bank (SVB).

This came two weeks after the US Federal Deposit Insurance Corporation took control of the US-based lender, which had served as the lifeblood to many startups before its downfall sent shockwaves through the financial sector, following a run on deposits that resulted in the bank’s insolvency.

In a written testimony to be delivered tomorrow, March 28, at a hearing of the Senate Banking Committee, Michael Barr, the Fed’s Vice Chair for Supervision, pledged that the Fed and other agencies would take any step they deem necessary to safeguard depositors and the banking system.

He said regulators “are prepared to use all of our tools for any size institution, as needed, to keep the system safe and sound.”

In terms of trading, gold for June delivery tumbled 1.50% to close at $1,953.80 an ounce.

Likewise, the US dollar index, which gauges the greenback's strength against a basket of six currencies, shed 0.20% to 102.89 points at 8:59 pm Makkah time.