Banking expert Sahar El-Damaty said that the turmoil in the banking sector indicates that gold prices will rise further during the coming period.
Al-Damati noted that the US Federal Reserve and the US Treasury took quick steps to limit the damages resulting from the recent collapse of banks in a bid to avoid what happened in the crises of Washington Mutual in 2008.
ln Europe, Credit Suisse Bank has been bought in a deal orchestrated by regulators to avoid further market-shaking turmoil in the global banking system, Al-Damati added.
In the same context, Al-Damati mentioned that the current crisis prompted investors to search for gold as a "safe haven" which also raises the prospect that U.S. interest rates will rise far less than previously thought.
According to a report recently issued by the World Gold Council, gold demand soared to an 11-year high in 2022 on the back of “colossal central bank purchases, aided by vigorous retail investor buying.
Annual gold demand jumped 18% to reach approximately 4,74, across the year, the largest annual figure since 1967.
The report indicated that over the period 1999-2021, ten countries were so focused on buying gold by acquiring 84% of purchases, especially Russia and China.
It noted that Russia and China accounted for almost 51% of the world's central bank purchases of gold.
Contributed by Ahmed Emam
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