Gold prices close at near-record high

Gold prices surged to a near-record high at settlement today, May 4, as US banking concerns accelerated a flight to the safe-haven asset as bets for a pause in interest rate hikes by the Federal Reserve mounted.

During today's trading, spot gold skyrocketed to $2,072.19 an ounce, shy of the record high of $2,072.49 per ounce. Further, US gold futures edged higher to $2,056.10 an ounce.

According to Reuters, Lorraine Goodwin, an economist at New York Life Investments, said that while the idea of a temporary pause in monetary tightening in the US is good news for investors, it implies the economy is slowing.

In a report issued earlier today, the White House Council of Economic Advisers discussed the risks behind America’s failure to lift the national debt limit, suggesting about 8.3 million job losses, a 6.1% slump in gross domestic product (GDP) and a stock market collapse to half of its current value.

Elsewhere, shares of some US banks continued their sharp decline, with escalating concerns about the aftermath of the recent series of reeling bank failures.

Shares of the Bacoist and Western Alliance Bancorp banks logged strong losses of more than 50%, while the “KBW” index of US bank stocks fell more than 5%.

Meanwhile, applications for US unemployment benefits rose by 13,000 — the most in six weeks, reaching 242,000 claims in the week ended April 29.

On May 3, US interest rate futures priced in a pause in Fed tightening at the June and July policy meetings, according to the CME's FedWatch tool.

In terms of trading, gold futures contracts for the most active month of June delivery rose by 0.9%, or $18.7, to finish at $2,055.7 an ounce.

On the other hand, the US dollar index, which gauges the greenback's strength against a basket of six currencies, saw a modest drop of 0.08% to reach 101.27 points at 8:42 pm Makkah time.