Gold soared on Tuesday as investors got cold feet over the health of the global banking sector, sparked Credit Suisse’s shares being suspended on financial backing worries.
An ounce of gold rose to £1,599 on Tuesday afternoon, up 3% on the £1,552 seen just after the markets opened in London.
The rise coincided with UK banking stocks falling, with Barclay’s PLC spiralling 8% on Tuesday, alongside HSBC Holdings PLC (LSE:HSBA), NatWest Group PLC (LSE:NWG) and Lloyds Banking Group PLC (LSE:LLOY), down 4.6%, 4% and 2.3% respectively.
Credit Suisse saw its shares suspended from trading on Tuesday morning as key investor, Saudi National Bank, warned it could no longer prop up the bank.
European banks also took a hit as a result, with the Swiss bank falling as much as 29% after trading in its shares resumes, before rising slightly to US$2.14, though this was still 14% lower than its opening price.
City Index analyst Fawad Razaqzada explained: “The selling of financial stocks was triggered by Credit Suisse,” as investors flocked to reduce their exposure to the Swiss lender.
Gold had already faced significant rises after last week’s collapse of Silicon Valley Bank in the US.
As a result, gold has risen over 4% in the last week, surpassing highs recorded in August 2020, April 2022 and last month, when it topped £1,588.