The continued concern of investors about a possible global banking crisis prompted stock markets in the world to record sharp weekly losses, to benefit in return gold prices from the increase in these fears, jumping nearly 6%.
Concerns dominated during last week's trading on most of the global and regional financial market indices due to the bankruptcy of Silicon Valley Bank and the failure of other banks due to high interest rates, which the Federal Reserve recently indicated that it will continue to raise it more than expected, despite this crisis, which has unclear repercussions so far.
And after supportive measures taken by regulators in the United States and Europe failed to calm fears of a global banking crisis, the US stock index, the Dow Jones Industrial Average, fell by 0.2%. European stocks recorded their largest weekly decline in five months, and the European Stoxx 600 index lost 3.8% of its value.
In the Gulf, the Egyptian Stock Exchange index led the declines by 10.6%, and the Qatari Stock Exchange index declined by more than 7.7%.
The Saudi Stock Exchange index, the Tasi, fell to its highest rate of decline this year, by 4.6%, and the Kuwaiti First Stock Market index fell 3.67%.
The Bahrain Stock Exchange index fell 0.67%, while the Muscat Financial Market index rose 0.8%.
Stock investors are awaiting the outcome of the monetary policy meeting by the US Federal Reserve next Wednesday amid expectations of a 25 basis point rate hike.
It is also noteworthy that during the past week, futures prices for benchmark Brent crude oil for April delivery recorded a weekly loss of 11.8%, and the price of US West Texas crude for April delivery declined 13%.
For his part, Taher Morsi, an economist and head of market research at Pilon Egypt, says that the collapse of Silicon Valley Bank, the largest global bank specialized in the emerging companies and technology sector, led to a state of fear and panic leaking out in the world, fearing the return of the scenario of the collapse of the banking sector in 2008, which cast a shadow. Clear liquidity movements in transactions, as outflows from high-risk assets rushed to head to more stable assets, led by gold, which is reflected in the historical rise of the yellow metal during the Friday session only by more than 3%.
The global banking crisis prompted investors to buy safe-haven bullion, as gold prices recorded their biggest weekly gain since mid-November 2022.
It is noteworthy that this crisis erased some of the gains of the Gulf markets and turned them into losses, as the Qatar Stock Exchange index fell 7.2%, and the Saudi Stock Exchange index fell, since the beginning of 2023, by 4.8%.
The Abu Dhabi Stock Exchange index fell 5.5%, and the Kuwait Stock Exchange index fell 3.4% during that period.
While the annual gains of the Muscat Securities Index decreased to 0.62%, and the annual Dubai Stock Exchange to 0.4%, the increase in the Bahrain Stock Exchange index in that period reached 0.09%.
