Gold is headed towards its best weekly performance since mid-November.

Today, Friday, the price of gold has risen due to a weak dollar and it is poised to achieve its biggest weekly gains since mid-November. This is because the global banking crisis has prompted investors to turn to the metal, which is considered a safe haven.

At 03:13 AM GMT, gold rose by 0.5% in spot trading to reach $1928.08 per ounce.

The US gold futures contracts also increased by 0.5% to $1932.10 dollars.

Since the beginning of the week, gold prices have risen by about 3.2% and are heading to record their third consecutive weekly gain.

The demand for safe havens has supported this increase, following the collapse of Silicon Valley Bank in the biggest banking failure since the financial crisis of 2008, according to Reuters.

On Thursday, major US banks injected $30 billion in deposits into First Republic Bank to rescue it from crisis.

This came after Credit Suisse announced that it would borrow up to $54 billion from the Swiss National Bank to support liquidity, as it was hit hard by the fallout of the collapse.

Eliya Spivak, the Chief of Global Macroeconomics at Testy Live, stated that the banking crisis appears to be beneficial for gold because it has led to a general feeling that central banks may back down on raising interest rates in the face of market risks and credit pressures.

However, the European Central Bank raised interest rates by 50 basis points yesterday as concerns about rising inflation outweighed fears of a global banking crisis.

It is expected that officials from the Federal Reserve (the central bank of the United States) will continue their campaign to combat inflation by raising interest rates by 25 basis points at the policy meeting in March.

The cost of keeping unprofitable alloys increases when interest rates rise, which raises the cost of the alternative opportunity.

The dollar index decreased by 0.2%, making gold more appealing to buyers who hold other currencies.

Among other precious metals, silver rose 0.9% in spot trading to $21.89 per ounce, platinum increased by 0.8% to $980.33, and palladium climbed 0.9% to $1443.80.

The three metals are expected to achieve weekly gains and it is anticipated that silver will register its best week since early December.