Gold ends more than 2% lower as market sentiment improves

Gold prices tumbled sharply at settlement today, March 21, as concerns about the banking system subsided with market focus turning to the Federal Reserve’s policy meeting.

Today, the yellow metal suffered its biggest daily decline in about six weeks, with US Treasury Secretary Janet Yellen pledging to continue supporting banks.

This came amid widespread reports of a possible lifting in the $250,000 ceiling on the federal guarantee on bank deposits, in a bid to shore up confidence in the financial system and prevent further distress among US regional banks.

Investors are awaiting the outcome of the closely watched Federal Open Market Committee (FOMC) meeting that is underway today and tomorrow, March 22, with markets pricing in a 25-basis-point (bp) interest rate hike.

In terms of trading, gold for April delivery shed 2.10%, or $41.70, to close at $1,941.10 per ounce.

The US dollar index, which gauges the greenback's strength against a basket of six currencies, settled at 103.29 points at 8:58 pm Makkah time.