2023.03.2918:08:00UTC+00Gold Futures Settle Lower As Banking Contagion Fears Abate

Gold futures settled lower on Wednesday as the commodity's safe-haven appeal dropped as worries over a possible banking crisis continued to ease after top U.S. regulators expressed confidence about the health of the banking sector.

Top U.S. regulators expressed confidence that banks were solvent, blaming the recent collapse of Silicon Valley Bank on mismanagement, rather than systemic risks.

A firm dollar and higher Treasury yields weighed as well on gold prices. The dollar index, which dropped to 102.37 earlier in the day, recovered to 103.79 subsequently.

Gold futures for April ended lower by $6.60 at $1,966.90 an ounce.

Silver futures for May ended up $0.048 at $23.466 an ounce, while Copper futures for May settled at $4.0865 per pound, up $00.10 from the previous close.

In the U.S. economic news, the National Association of Realtors released a report showing pending home sales in the U.S. unexpectedly increased for the third straight month in February.

NAR said its pending home sales index climbed by 0.8% to 83.2 in February after spiking by 8.1% to 82.5 in January. Economists had expected pending home sales to slump by 3%.

The pending home sales index reached its highest level since hitting 88.3 last August but was still down by 21.1% compared to a year ago.