Bank Turmoil to Push Gold to Higher Levels, Says Banking Expert

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