Fitch Solutions has revised its 2023 price forecast for gold to $1,950 per ounce (oz) from $1,850 previously as the banking turmoil has triggered a rush to safety among investors fearing recession, while market expectations for aggressive rate hikes by the US Federal Reserve have now collapsed.

"We believe the mounting of global financial instability is likely to drive gold prices towards its all-time high of $2,075/oz in the coming weeks, although there is significant resistance around that level as the US dollar remains strong while we believe that contagion risks from the demise of Silicon Valley Bank (SVB) and Signature Bank will be broadly limited," the research and analytics firm said in a note.

Early on Tuesday, spot gold was up 0.2% at $1,982.59/oz. US gold futures also rose 0.2% to $1,986.30.

Fitch Solutions said among the factors that are supporting gold are:

- Market panic over the banking turmoil: The collapse of SVB and Signature Bank in the US, and Credit Suisse in the EU in early March sent ripples through financial markets.

-  Peaking of bond yields: Falling real bond yields, and a significant drop in rates expectations since the collapse of SVB have driven the gold price rally in March and will continue to support the non-yielding asset gold.

- Weakening US Dollar: The US dollar has weakened significantly since late 2022, with the Dollar Index hovering around 103 on March 18, 2023, compared to 114 in September 2022. This has been driven by the expectation that the Fed’s hiking cycle is coming close to an end.

- Recession Fears: Amid expectations the global GDP growth will slow from 3.1% in 2022 to 2.1% in 2023, investor interest in gold's safe-haven status will remain strong.

- Geopolitical risks: - Russian invasion of Ukraine is expected to continue until at least H2-2023 while tensions between US and Mainland China is likely to rise, keeping investor interest in gold elevated as investors seek safety.  

(Writing by Brinda Darasha; editing by Daniel Luiz)