The price of gold last week neared its highest price in history – the $2,070.88 per ounce recorded in August 2020, which occurred during the global economic havoc wreaked by the Covid-19 outbreak.
Last Tuesday’s monthly high price of gold was around $2,009 per ounce, and a bullish trend is forecast to continue.
With the global economy rocked by the recent bank collapses in the US and serious banking trust issues in Switzerland, gold as a safe-haven asset may break its record high.
“A scramble by Switzerland’s authorities to shore up confidence in Credit Suisse went some way to calming panicked investors [on March 16], but the country’s second-biggest bank may yet need more help if it is to survive,” CNN Business reported.
PP Link Securities (PPLS) business manager Long Samnang says developments in rescuing Credit Suisse have since shown no signs of reversing gold’s bullish direction.
And with the effects of the crisis likely to continue, investors should avoid fears of a bearish trend as gold prices are so high, with such low confidence in the banking sector dispelling sentiment to sell.
“Customers withdrew 123 billion Swiss francs ($133 billion) from Credit Suisse in 2022 – mostly in the fourth quarter – and the bank reported in February an annual net loss of nearly 7.3 billion Swiss francs ($7.9 billion), its biggest since the global financial crisis in 2008,” the CNN Business report added.
Investing.com reported on March 26: “US and European officials warned over the weekend that the banking sector was being closely monitored for any signs of a potential credit crunch.
“The latest source of market concern came from Deutsche Bank AG, whose shares plummeted last week after the cost of insuring the bank’s debt against potential default shot up to near five-year highs.”
Samnang said that based on the unfavourable global economic situation, geopolitical issues, the continuing Russia-Ukraine war and crises in the banking sector, analysis pointed to further gains for gold.
For this week’s trading recommendation, investors and traders could consider buying gold rather than selling.