(Bloomberg) -- Gold kept rising in Asia — after jumping 2% on Friday — as investors flocked to havens following the collapse of a US bank.
The failure of Silicon Valley Bank — the second-largest collapse of an American lender in history — has spurred nervousness about potential spillover effects across the financial system and prompted regulators to move to protect depositors’ funds on Sunday.
Bullion is benefiting from the uncertainty, and is at a one-month high after having risen more than 3% since Wednesday’s close as concern over SVB grew. Meanwhile, US data released late last week painted a mixed picture of the economy as the Federal Reserve mulls picking up the pace of interest-rate hikes.
Inflation figures due Tuesday may be critical in determining the central bank’s next move, while the SVB fallout is also likely to have an impact. The resulting financial strains at the US regional bank level may be making an aggressive move by the Fed later this month less likely.
Spot gold rose 0.4% to $1,876.25 an ounce as of 9:25 a.m. in Singapore after climbing as much as 1.1% earlier to the highest since Feb. 9. The Bloomberg Dollar Spot Index declined 0.4% following a similar drop on Friday. Silver and palladium advanced, while platinum was steady.