Gold rises to $2,000 as economic jitters boost safe haven demand By

-- Gold prices rose to key levels on BrokerageWednesday, buoyed by safe haven demand as a string of weak U.S. company earnings and economic data fueled fears of a potential recession this year.

Resurgent fears of a banking crisis also boosted safe haven demand, after (NYSE:) logged a substantially bigger-than-expected decline in its deposits, souring sentiment towards regional banks.

The yellow metal rose on Tuesday in tandem with the , indicating that investors were largely seeking safe havens amid growing economic uncertainty. This was also accompanied by sharp losses in risk-driven markets, with losing between 1% and 2%.

Softer-than-expected U.S. data also pointed to slowing consumption this year, which puts a damper on economic growth. 

rose 0.2% to $2,001.76 an ounce, while rose 0.4% to $2,011.65 an ounce by 20:26 ET (00:26 GMT). Both instruments rose sharply on Tuesday, and were set for a third straight day of gains.

“Gold is trying to get back where it belongs, above the $2,000 an ounce level… Gold’s bullish outlook is based on the rising amount of risk that is on the table: earnings risk, slower lending, financial stability concerns, and sticky inflation,” Edward Moya, senior market analyst at Oanda wrote in a recent note. 

Uncertainty over monetary policy and a stronger dollar had weighed on gold in recent weeks, as markets were split over when the Federal Reserve could halt its rate hike cycle. The bank is widely expected to when it meets next week, and is likely to provide some cues on how much higher interest rates will go.

But with economic growth likely to deteriorate under rising interest rates, markets are betting that the Fed could taper its hawkish stance this year to prevent more damage. Still, the bank has given no such indication, with several Fed officials calling for more rate hikes in recent weeks.

Other precious metals also advanced on Wednesday, benefiting from increased safe haven demand. rose 0.5%, while added 1%. 

Among industrial metals, copper prices steadied from recent losses, as the prospect of worsening economic growth pointed to weaker demand for the red metal.

rose 0.1% to $3.870 a pound, but were trading down nearly 3% for the week, after falling by a similar margin last week. 

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