Gold prices rose, Friday, heading to record the best monthly performance since July 2020, as the banking system crisis led to the expectation that the Federal Reserve (the US Central Bank) would temporarily stop raising interest rates, which makes the yellow metal more attractive.

And gold in instant transactions rose 0.1 percent to 1981.59 dollars an ounce, reports Al-Rai daily quoting Reuters.

US gold futures rose 0.1 percent to $1,982.00. The precious metal is also heading for its second consecutive quarterly gain, up 8.6 percent so far.

On the other hand, the dollar is heading for its second consecutive quarterly loss, making gold cheaper for buyers abroad.

Gold surpassed the $2,000 level after the sudden collapse of two US banks earlier this March, which raised bets that the Federal Reserve might stop raising interest rates to avoid broader repercussions of the global banking system turmoil.

Although gold is considered a hedge amid economic uncertainty, higher interest rates tend to weaken its attractiveness because it does not generate a return. However, prices fell after a short period due to the intervention of the authorities with rescue measures.

“There is speculation that the banking crisis may not have ended yet, but the problems are not apparent or affecting the markets at the present time … therefore gold is holding between 1930 and 2000 dollars,” said Ilya Spivak, head of macroeconomics at Tasty Life.

Spivak added that gold faces downside risks because the market expects the Federal Reserve to stop raising interest rates temporarily, which contradicts what the US Central Bank says and may contradict upcoming data.

Markets are awaiting the PCE data, seeking more evidence of the US central bank’s next move.

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