Gold is heading for the best monthly performance since July 2020

Gold prices rose on Friday, heading to record the best monthly performance since July 2020, as the banking system crisis led to the expectation that the Federal Reserve (the US Central Bank) would temporarily stop raising interest rates, which makes the yellow metal more attractive.

By 0321 GMT, spot gold rose 0.1 percent to $1981.59 an ounce, and US gold futures rose 0.1 percent to $1982.00.

The precious metal is also on track for its second consecutive quarterly gain, up 8.6 percent so far.

The dollar is heading for its second straight quarterly loss, making gold cheaper for overseas buyers.

Gold surpassed $2,000 after the sudden collapse of two US banks earlier in the month, raising bets that the Federal Reserve may stop raising interest rates to avoid wider repercussions from the global banking system turmoil.

Although gold is considered a hedge amid economic uncertainty, higher interest rates tend to weaken its attractiveness because it does not generate a return.

However, prices fell after a short period due to the intervention of the authorities with rescue measures.

Markets are awaiting the PCE data, seeking more evidence of the US central bank’s next move.

Among other precious metals, silver settled in spot transactions at $23.87 an ounce, platinum also settled at $986.12, while palladium fell 0.5 percent to $1457.39.