Credit Suisse crisis fuels gold rally, prices jump highest since February

Gold prices on Wednesday jumped over 1% to their highest since early February as Credit Suisse crisis turned investors away from riskier assets and the incesters moved to the safety of the yellow metal.

Spot gold prices climbed 1.2% to $1,924.63 per ounce by 1556 GMT. The gold futures in US gained 1.1% to settle at $1,931.30.

Renewed unease gripped world markets and Europe's bank stocks came under pressure after the largest investor of Credit Suisse said it could not provide the Swiss bank with more financial assistance.

Phillip Streible, chief market strategist at Blue Line Futures in Chicago said, "It's a total safe-haven trade. There's a lot of concern about Credit Suisse and now European banks are really coming under quite a bit of pressure. So it's a complete flight to safety." 

Streible furteher said, "People are going to the US Treasuries, gold, silver, and the dollar. They're exiting riskier assets like US equities and economically-sensitive metals like copper, platinum and palladium"

Spot silver added 0.6% to $21.82 per ounce. Platinum price fell 2.4% to $958.76, and palladium was down 3.1% to $1,459.79.

Gold is traditionally seen as a hedge against inflation, but the opportunity cost of holding the non-yielding asset rises when interest rates are increased to bring down inflation.

Overall focus was still on the Federal Reserve's next move on interest rates as it assesses data showing elevated inflation in February against the backdrop of the collapse of two regional banks.

Markets put a 57.1% chance on the Fed holding its benchmark rate at current levels at its March 21-22 policy meeting.