Gold extends losses, dollar loses ground

Gold prices declined on Monday by over 1% even as the dollar dipped against most  major rivals, with risk appetite improving the markets as banking concerns subside. 

Intervention 

The stock market rebounded strongly today, with the SPDR S&P fund for local banks rising 3%, while First Republic bank rose 23%.

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

‎In Europe, concerns about Deutsche Bank calmed down as well with the stock rebounding as costs of insuring its debts declined.

The Fed

The Federal Reserve hiked interest rates by 25 basis points last week to 5% as expected.

It's the ninth rate hike in a row by the Federal Reserve since starting the current policy tightening cycle in March 2022.

The Fed asserted the US banking system remains strong and sound, while expecting stricter credit conditions for individuals and corporations in the future, in turn impacting economic activities and inflation.

Fed Chair Jerome Powell said it's unlikely for the Fed to cut interest rates this year, while opening the door for another rate hike to bring inflation back to targets.

The dollar index fell 0.2% to 102.8 as of 18:54 GMT, with a session-high at 103.2, and a low at 102.8.

Gold spot prices fell 1.4%, or $27 as of 18:55 GMT to $1,957 an ounce.