UBS’s deal for the embattled bank helps to calm nerves and supports the unwinding of safe-haven flows, analyst says
Bengaluru — Gold prices dropped on Monday, with their safe-haven appeal diminished as risk sentiment improved after Swiss lender UBS sealed a deal to buy peer Credit Suisse in a rescue effort to stabilise global financial markets.
On Sunday, UBS agreed to buy 167-year-old Credit Suisse for $3.23bn and assume up to $5.4bn in losses in a deal backed by a huge Swiss guarantee. “The race to reassure markets over the recent global financial instabilities continues … with UBS’ rescue deal for Credit Suisse aiding to calm some nerves and supporting some unwinding of safe-haven flows in gold,” said Yeap Jun Rong, market analyst at IG.
Meanwhile, markets are pricing in a 25 basis point interest rate hike by the US Federal Reserve on Wednesday.
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