According to the Indian Bullion and Jewellers Association (IBJA), gold (999 variety) closed higher at Rs 59,479 per 10 grams on Monday evening as against Rs 58,220 on Friday. Gold hit Rs 60,100 in Delhi. Bullion prices gained as a wave of banking crises shook global markets and put bullion on track for its biggest weekly rise in three years while bets solidified for a less aggressive US Fed in its fight against inflation.

In London, gold crossed the level of $2,000 an ounce for the first time in a year. “Extreme risk off sentiments and caution prevails in markets and gold is a major beneficiary of this crisis,” said Ravindra Rao, Head Commodity Research, Kotak Securities. When global stock markets and the financial sector face problems, investors turn to gold as a safe haven asset.

Colin Shah, MD, Kama Jewelry, said, “Gold prices have risen almost 7-8% in the past month. The rally in the yellow metal is primarily due to the banking crisis in the west. The liquidity infused by the central banks and the expectations of lower to no rate hikes is pushing gold prices up. Gold is a safe haven, historically it has gained in periods of uncertainty.”

Gold prices hitting a fresh high is a sign of slower economic growth and lower interest rates with ample liquidity to help the system steer off the current situation, Shah said.

Bullion is purchased as a safe haven after the sudden fallout of the SVC Bank and other banks. US bond rates saw unprecedented weakness, the dollar index fell and gold prices increased on Monday. In view of the banking crisis and conflicting US economic statistics, the US Fed is expected to convene this week on March 22. The policy outcomes may provide further guidance for the bullion markets. Gold, a safe haven asset, is currently in a very favourable financial and economic situation.

WTI Crude oil futures saw the biggest weekly decline in 2023, falling almost 13 per cent, below $67 per barrel, to a sixteen-month low as global banking turmoil stoked fears of an impending recession.