Precious Metal Benefits Amid Banking Troubles

As a result of a flight to safe-haven assets brought on by the failure of a significant US bank, gold dipped in Asia on Tuesday after rising more than 5% in the previous three days.

The dollar increased on Tuesday for the first time in four sessions, which placed pressure on the precious metal. The increase in gold bullion on Monday was 2.4%, the largest since November of last year.

Potential systemic risks for gold

Bullion has benefited from the failure of the Silicon Valley bank, a dramatic decline in Treasury prices, and a weak dollar.

Further information suggests that the Fed would be obliged to curtail its rapid tightening of monetary policy due to the risks posed by the SVB supporting gold in addition to the banking crisis.

Industrial metals are also under pressure from the potential for further economic crisis as they have joined the flight from risky assets, with zinc closing in on its lowest level since November and copper falling 1.2%.

In Shanghai trading, spot gold decreased 0.6% to $1,902.74 an ounce while the Bloomberg spot dollar index increased 0.2%.