Gold on track for second quarterly profit in row amid the banking crisis

Gold prices declined in European trade as dollar rebounded from one-week lows against a basket of major rivals, ahead of US consumer spending data, important for gauging inflationary pressures. 

The precious metal is on track for another quarterly profit on strong haven demand amid mounting concerns about the banking sector in the US and Switzerland, and on speculation that global central banks will wrap up the current cycle of policy tightening soon.

Gold Prices Today

Gold prices fell 0.4% to $1,973 an ounce, after rising 0.8% yesterday, the second profit in three days as the dollar dipped. 

The Greenback

The dollar index rose 0.3% on Friday off one-week lows at 102.05, against a basket of major rivals.

The gains came as investors focus once more on data with banking concerns subsiding as US authorities intervene to contain the fallout of the collapse of several banks. 

Additionally, three Fed members opened the door for more rate hikes in the future to contain inflation.

Fed Rates

Following such remarks, pricing for no change in interest  rates at the Fed's May meeting fell from 57% to 45%, while pricing for a 0.25% rate hike rose to 55%.

Consumer Spending Data

Investors await important US consumer spending data later today, crucial for gauging inflationary pressures and the path forward for monetary policies. 

Quarterly Profits

Gold prices are up a strong 8.5% so far in the first quarter of the year, the second such profit in a row. 

Gold prices hit one-year highs at $2,009 an ounce on March 20 on haven demand amid concerns about the banking sectors. 

Such concerns exploded after the Silicon Valley Bank's collapse alongside two other smaller banks in the US, followed by credit troubles for the Swiss Credit Suisse Bank.

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 929.47 tones, the highest since October 2022.