As Deutsche Bank Jitters Spread, Gold Futures Are Approaching The $2,000 Mark

On Friday, the U.S. stock market declined as banking sector concerns moved to Germany's Deutsche Bank and the gold futures market fought to maintain above the crucial $2,000 per ounce threshold.

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The price of silver increased as well, reaching its highest point in more than six weeks.

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Price movement

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• The price of gold for April delivery (GC00, -0.32% GCJ23, -0.32%) increased $1.10, or roughly 0.1%, to $1,997 per ounce on Comex, although Friday trading saw a seesaw between slight losses and gains. According to Trade Algo data, they reached a settlement price of $1,995.90 on Thursday, the most for a most active contract since March 10, 2022. Prices were on track to increase by about 1.2% for the week.

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• The price of silver for May SI00, 0.60% SIK23, 0.60% futures increased by 20.9 cents, or 0.9%, to $23.465 per ounce, reaching levels last seen in early February.

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• Although April platinum PLJ23, -0.80% fell by $13.10, or 1.3%, to $979.80 per ounce, June delivery palladium futures PAM23, -1.38% fell by $19.30, or 1.4%.

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• HGK23, -1.32% Copper futures for May delivery saw a 1% decline, dropping 4 cents to $4.084 per pound.

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Market Forces

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According to Adrian Ash, the research director at BullionVault, "the plague of the huge round figure has struck again," and gold is difficult to move over $2,000 at the moment.

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After reaching intraday highs above $2,000 twice earlier this week, gold prices traded as high as $2,006.50 on Friday, but prices haven't settled above that crucial level since March 10 of last year.

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After the bankruptcy of California's Silicon Valley Bank a few weeks ago, gold has benefited from flows into safe haven assets.

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Global markets were once again in a risk-off mode on Friday as Deutsche Bank AG DBK, -8.53% shares fell more than 13% and Treasury yields decreased as investors flocked to the security of government paper.

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Similar to 2008, when the Bear Stearns bailout caused gold to reach its first all-time high of $1,000 per ounce, "gold has gained a solid bid from antsy investors and savers, but in a legitimate crisis everything gets sold," said Ash, pointing out that steep losses in stocks can work against bullion prices.

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The robust demand for gold emanating from central bank purchases as well as China's private sector demand, he noted, are the main differences from 15 years ago.

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With a growing floor created by starting to emerge sovereigns and families, the underlying strength that has seen gold handrail higher over the last five years looks certain to continue, according to Ash.