Gold hits record highs as investors scramble for safety in week of bank turmoil
Gold prices reached record highs in the UK last week as investors scrambled for safety in the wake of Silicon Valley Bank’s (SVB) collapse and an ensuing banking crisis on both sides of the Atlantic.
Gold, typically seen as a safe haven asset by investors in times of turmoil, showed its strongest weekly gain since mid-November, with prices reaching £1,634 per ounce on Friday, according to trading platform Bullion Vault.
Gold priced in euros meanwhile hit €1,848, the highest level aside from a peak of €1,900 when Russia invaded Ukraine early 2022. Gold prices in Australian dollars, Japanese yen and Indian rupees also touched record highs last week, according to Bullion Vault.
Investors poured cash into the safe-haven asset throughout the week amid extreme volatility on equity markets, triggered by SVB’s collapse and fears of a looming crisis at embattled Swiss lender Credit Suisse.
The FTSE 100 closed down over 5.3 per cent over the week, dragged down by sharp falls in Britain’s big four lenders Barclays, Lloyds Banking Group, Barclays and Natwest, as well as telecoms giant BT.
Gold prices had settled this year after spiking in the wake of Russia’s invasion in 2022. However, analysts said the banking crisis has reignited a flood of investment into gold to escape the market swings.
“With the shock of war and inflation fading even as their impact intensifies, gold had been lacking urgency for new investment,” said Adrian Ash, director of research at Bullion Vault.
“That’s all changed on the banking crash, and gold is suddenly finding strong investment inflows on top of the solid consumer demand and record-heavy central bank buying it’s already enjoying.”
Bullion Vault said by Tuesday last week the pace of new daily account openings had tripled since Sunday, hitting the highest levels since gold peaked on Russia’s invasion of Ukraine last March.