Investing.com — Gold prices hit a one-month high on Monday, recovering sharply from recent losses as markets bet that a burgeoning banking crisis in the U.S. will push the Federal Reserve into softening its hawkish rhetoric in the coming days.

The dollar fell sharply against a basket of currencies, while an inversion in the yield curve lessened after the failure of Silicon Valley Bank (NASDAQ:SIVB) saw markets reassess their outlook for U.S. interest rates, as U.S. regulators rushed to restore faith in the banking system.

Over the weekend, the Fed rolled out emergency measures to make borrowing easier for embattled banks. The White House also assured Silicon Valley Bank depositors that it will cover all withdrawals.