Gold and copper rose as the collapse of Silicon Valley Bank spurred investors to seek safe havens.
(Bloomberg) — Gold and copper rose as the collapse of Silicon Valley Bank spurred investors to seek safe havens.
The American lender’s demise sparked such a severe drop in regional bank stocks that automatic trading halts were triggered on Monday. More broadly, more than half the companies in the S&P 500 Index fell while two-year Treasury yields headed for the biggest daily slump in decades.
“With two-year yields almost down 1% in less than a week and the market increasingly pricing away the prospect for a rate hike, gold has to go higher,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S. “Gold is the most rate- and dollar-sensitive commodity.”
It’s a rapid turnaround for gold, which in the year prior to last week’s rapid meltdown of SVB was down 12%. The precious metal has now jumped above its 50-day moving average, signaling a change in momentum.
Read More: Copper, Gold Tells Us Market Thinks Fed’s Job Got Harder
Spot gold rose as much as 2.4% to $1,913.13 an ounce. It has climbed roughly 5% since the March 8 settlement as concern over SVB grew.
Copper rose 0.9% to $8,950 a metric ton on the London Metal Exchange at 4:51 p.m. in London. Aluminum rose 0.8% with other base metals also recording gains.
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