Gold Dropped As Risk Sentiment Improved After Credit Suisse Secured A Lifeline

Gold yesterday settled down by -0.57% at 58006 after global stocks rebounded from recent losses as risk sentiment improved after Credit Suisse (SIX: CSGN ) secured a lifeline from the Swiss National Bank. In the US, Silicon Valley Bank and Signature Bank collapsed and shares of First Republic Bank remain under heavy pressure. At the same time, Credit Suisse said it would borrow up to $54 billion from the country's central bank under a covered loan facility and a short-term liquidity facility. Meanwhile, the ECB lifted interest rates by 50bps as initially pledged, pushing borrowing costs to fresh 2008 highs, aiming to fight high inflation, while noticing that the Euro Area banking sector is resilient and standing ready to provide liquidity support to the financial system if necessary.

The Fed is set to decide on monetary policy next week. China's central bank announced it had bought more gold nearly 25 metric tons in February, the fourth consecutive monthly increase. The February purchase follows about 32 tons of gold added in November, the first officially recorded increase since September 2019, according to data released by the People's Bank of China. By the end of February, China's total gold reserves rose to around 2,050.34 tons, PBOC data showed.

Technically market is under long liquidation as the market has witnessed a drop in open interest by -6.69% to settle at 8689 while prices are down -330 rupees, now Gold is getting support at 57725 and below same could see a test of 57445 levels, and resistance is now likely to be seen at 58405, a move above could see prices testing 58805.

Trading Ideas:
# Gold trading range for the day is 57445-58805.
# Gold dropped as risk sentiment improved after Credit Suisse secured a lifeline.
# The ECB lifted interest rates by 50bps as initially pledged, pushing borrowing costs to fresh 2008 highs, aiming to fight high inflation
# Commerzbank (ETR: CBKG ) sees gold prices at $1,800/t in Q223.