Bullion Higher As Fed Pause Expectations Grow Given Latest Banking Woes

Gold has continued to struggle to hold onto gains above $2000/oz. Today during APAC trading it has risen through that level but is currently trading just below. Gold is up 0.5% to $1999.182, close to the intraday high of $2000.96, after falling 0.4% on Wednesday despite the USD index also dropping 0.4%.

• Gold has benefited from flight to quality flows today as speculation grew that the Fed will have to pause given the most recent US banking troubles. Today and tomorrow’s data should be key in shaping the Fed outlook.
• First Republic’s earnings were significantly worse than expected and US regulators are now considering whether to impose borrowing restrictions on the troubled bank, according to Bloomberg.
• Later there is important US Q1 GDP data which is expected to rise 1.9% q/q saar. The price components are also likely to be watched closely and the core PCE price index is forecast to rise 4.7% q/q saar – more than Q4’s 4.4%. There are also jobless claims and pending home sales for March.