By Barani Krishnan
Investing.com -- Gold solidified its hold on the $1,900 perch on Wednesday, hitting a new six-week high, as the U.S. banking crisis that began with California’s Silicon Valley Bank turned global with a heightened focus on the troubled finances of leading European investment banker Credit Suisse (SIX:CSGN).
The front-month April gold futures contract on New York’s Comex settled at $1,931.30 an ounce, up $20.40, or 1.1%. The session high was $1,942.45, a peak since the $1,959.10 registered on Feb. 2.
The spot price of gold, more closely followed than futures by some traders, was at $1,917.49 by 16:18 ET (20:18 GMT), up $13.48, or 0.7%. The session high for spot gold was $1,937.37, also marking a six-week high.
Spot gold’s technicals show that it has potential to go much higher, albeit with some correction, before running into serious resistance at around $1,970, said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.
“Going forward, some consolidation towards support areas of $1,910-$1900 will add more strength for extended upside potential towards the major swing high of $1,960 and the extra mile of $1,972 before sellers start lurking,” said Dixit.
Credit Suisse's (NYSE:CS) share price plunged 28% in the biggest one-day selloff on record, leaving it down more than 75% over the past year, as questions grew about its solvency.
The crisis at CS came into greater focus on Wednesday after its biggest shareholder Saudi National Bank responded with a resolute “absolutely not” when asked if it was open to doing further cash injections into the Zurich-based investment bank.
Notwithstanding the cold response it got, Credit Suisse has appealed to its largest shareholder for a “public show of support”, the Financial Times reported.
The Zurich-based investment bank also appealed to its central bank for support, and found better support there. Referring to Credit Suisse, the Swiss National Bank said it would “provide liquidity to the globally active bank if necessary,” and downplayed liquidity concerns at the investment bank.
In the United States, the Treasury Department said it was reviewing U.S. banks' exposure to Credit Suisse.