Gold edges down as dollar muscles up

Gold prices declined on Wednesday as the dollar gained ground against most major rivals while fears subside over the banking sector, boosting demand on riskier assets away from havens such as precious metals.

Ongoing Troubles

While concerns over the banking crisis in the US eased recently with authorities intervening to prop up the sector, investors remain concerns about a potential recession due to policy tightening by the Federal Reserve.

BlackRock executives recently ruled out a rate cut this year because of the banking crisis, but noted the Fed might continue to hike interest rates to control inflation.

Additionally, the First Citizens bank agreed to purchase Silicon Valley Bank and carry its entire loans and private deposits.

US President Joe Biden started the banking crisis isn't over yet and warned from compliance.

In Europe, concerns about Deutsche Bank calmed down with the stock rebounding today, and with costs for insuring its debts declined.

Wall Street was boosted by the gains in the banking sector, with the SPDR-S&P index for regional banks rose over 1%.

The VIX "fear index" for Wall Street, which monitors volatility, tumbled 3.55% to 19.26, the lowest since March 8.

Otherwise, the dollar index rose 0.2% as of 18:55 GMT to 102.6, with a session-high at 102.7, and a low at 102.3. 

Gold spot prices fell 0.2% as of 18:55 GMT, or $5.1 to $1,968.5 an ounce.