Gold prices were on the rise again on Friday, as further market turbulence over the banking crisis in the US and ‘Europe drove investors to seek out safe-haven assets.

Gold has been accruing gains since Monday when it began trading at $1,879 per ounce, eventually starting Friday’s trading at $1921, and hitting $1989 by the close.

Gold has traditionally been a safe-haven asset which investors turn to in times of crisis to hedge risk. During periods of economic instability, stock market crises, military conflicts and pandemics investors have sought to park their wealth in it until after the storms pass.

As the banking sector sees fears of contagion grow now, investors are ramping up their gold-buying to counter any potential fallout.

Craig Erlam, senior market analyst at Oanda, said, “The question on traders’ lips now is whether fear is baked in, meaning yields could pare declines as the dust settles, which could be a near-term headwind for gold, or if the turbulence is just getting started. Time will tell but further fallout could see gold move closer to February highs, around $1,960, with $2,000 then key above that.” 

Meanwhile, major US banks are teaming up to try and get a handle on the US banking crisis before it spreads by putting together a cash rescue package for First Republic Bank, after the collapse of two other mid-sized lenders, Silicon Valley Bank, and Signature bank.

Bank of America, Citigroup, JPMorgan Chase and Wells Fargo have all announced they are each depositing $5 billion in uninsured accounts with First Republic, as Goldman Sachs and Morgan Stanley have each pledged $2.5 billion. BNY-Mellon, PNC Bank, State Street, Truist, and US Bank all pledged $1 billion each.