Fun

Analysts Suspect Banking Crisis Triggered ‘Resting Bull Market’ in Gold, Silver Could Print Much Higher Gains

News Feed - 2023-03-19 03:03:13

Analysts Suspect Banking Crisis Triggered "Resting Bull Market" in Gold, Silver Could Print Much Higher Gains


At the start of the week, a troy ounce of .999 fine gold was trading at $1,813 per unit. Seven days later, gold rose 9.65% against the U.S. dollar to the current spot price of $1,988 per ounce. Gold’s rise comes at a time when confidence in the global banking system is at an all-time low, and five major banks have received bailouts. An ounce of fine silver also increased in value, rising more than 12% from $20.01 to $22.59 per ounce this week. Gold and Silver Prices Surge Amid Banking Crisis and Expectations of a Dovish Fed


The price of gold is approaching the $2,000 per ounce mark after numerous U.S. and international banks showed signs of extreme weakness. The Federal Reserve lent banks $164.8 billion in five days, erasing almost 50% of the U.S. central bank’s monetary tightening policy. As a result, the market expects a dovish rate hike this month, possibly around 25 basis points, or even no rate hike at all after the financial calamity the banking industry has faced. According to TD Securities’ global head of commodity strategy Bart Melek, this is “good news for gold,” he told Kitco News.


“Markets are concluding that we’ll see the Fed go for another 25bps increase and then probably sit on it for a while and see what happens,” Melek explained. “The view from the gold perspective is that given disruptions in the banking system and the U.S. Treasury Department’s willingness to help, we might get accommodation that allows inflation to hang around longer at a higher level.” XAUUSD chart by TradingView



Gold surged 9.65% against the U.S. dollar this past week, and silver also rose 12.61% higher over the last seven days. Meanwhile, the U.S. Dollar Index (DXY) has fallen from 105.65 at the start of the week to the current level of 103.864. Statistics analyst and market movement forecaster Northstar tweeted about gold’s performance over the years compared to the DXY 21 days ago. “In 1974, the DXY was 105 [and] gold was $150,” Northstar said at the time. “In 1981, DXY was 105 [and] gold was $450. Today, DXY is 105, [and] gold is $1,810. Do not fear a rising U.S. Dollar Index – over time, gold faithfully tracks purchasing power destruction.”


Bloomberg’s senior macro and commodities strategist Mike McGlone referred to gold as a “resting bull” three days ago, on March 15. “Gold appears to be a rare resting bull market compared to most risk assets and commodities that are reverting from getting overextended, on the back of pandemic-related excess liquidity,” McGlone said in an investors’ note. “Plunging crude oil may be part of the deflationary spark for the metal to breach resistance of $2,000 an ounce. If history is a guide, 300 rapidly declining commodities, a banking crisis, and Federal Reserve tightening pose an oxymoron and could trigger a Fed pivot buoying gold,” McGlone added. Silver Could Post Much Larger Gains than Gold; Bitcoin Poised to Trade like Gold and U.S. Treasury Long Bonds


Richard Mills, the owner of aheadoftheherd.com, explained on Friday that he believes silver’s rise is understated. “Current indications show that silver is way undervalued,” Mills said. “Right now, on the morning of March 17, the gold-silver ratio is 88:1, meaning it takes 88 ounces of silver to buy one ounce of gold.” Mills added that when gold reached $2,000 per ounce, “silver rallied to nearly $30 an ounce, a 147% increase.” The investor said that the silver-gold ratio just fell from over 100:1 to just over 64:1, and he opined that a significant rise in silver’s value “could easily happen again.”


Many gold and silver proponents have high hopes for the precious metals going forward. Moreover, while McGlone believes gold will be affected by the current macroeconomic events, the market strategist also thinks the banking issues may be a defining moment for bitcoin (BTC). “Bitcoin may be progressing to trade more like US Treasury long bonds and gold as banks come under stress on the back of the bond-price collapse. Bitcoin sustaining above $25,000 is a clear sign of divergent strength,” McGlone tweeted. Tags in this story asset allocation, Banking Crisis, Bart Melek, Bitcoin, commodities, commodity prices, Cryptocurrency, Diversification, Federal Reserve, Financial Markets, Global Economy, gold, inflation, investment, Investors, market analysis, Market Disruption, Market Forecast, market outlook, Market Performance, Market predictions, Market Risks, Market Strategy, Market Trends, Market Uncertainty, market volatility, Mike McGlone, Northstar, Northstar Charts, pandemic, portfolio management, Precious Metals, Richard Mills, risk assets, silver, trading strategies, US Dollar Index, US Treasury Bonds, Wealth preservation


What are your thoughts on the current state of the global banking system and its potential impact on the value of gold, silver, and other assets like bitcoin? Do you think we’re headed for a major financial crisis, or is this just a temporary blip? Let us know in the comments section below. Jamie Redman


Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today. UBS Considers Acquiring Credit Suisse, Requests Government Backstop in Deal NEWS | 3 hours ago FTX Debtors Reveal $6.8 Billion Hole in Balance Sheet Amidst Financial Discrepancies and Payments to Insiders NEWS | 9 hours ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleElon Musk Criticizes Federal Reserve’s Data Latency and Calls for Immediate Rate Drop Amidst Banking Chaos Next articleUBS Considers Acquiring Credit Suisse, Requests Government Backstop in Deal Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFidelity Investments Launches Crypto, Metaverse ETFs — Says "We Continue to See Demand"


Fidelity Investments, one of the largest financial services firms with more than $11 trillion under administration, is launching exchange-traded funds (ETFs) focusing on the crypto ecosystem and the metaverse. "We continue to see demand, particularly from young investors, for access ... read more.Bitcoin ATM Operator Indicted in New York Allegedly Running Illegal Business Attracting Criminals Argentinian Securities Regulator Launches Innovation Hub to Discuss Regulated Crypto Investments Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing

News Feed

On-Chain Data Reveals Binance’s Strategy Behind Massive Ethereum And Solana Sell-Off
Este artículo también está disponible en español. As the broader cryptocurrency market grapples with significant downturns, Ethereum (ETH) and Solana(SOL) have emerged as
Trump Backs Crypto at Historic White House Summit – Here Are the Best Altcoins to Invest in Now
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Robert Kiyosaki: I’m a Bitcoin Investor — When BTC Hits New Bottom, I Get Excited
Robert Kiyosaki: I"m a Bitcoin Investor — When BTC Hits New Bottom, I Get Excited The famous author of the best-selling book Rich Dad Poor Dad, Robert Kiyosaki, says he is not wo
Tether CEO advocates for localized AI models to prevent hacks
Savannah Fortis14 hours agoTether CEO advocates for localized AI models to prevent hacksTether CEO Paolo Ardoino responded to OpenAI’s recent hack by claiming that localized AI models are the key to ensuring independen
Martin Young5 hours agoChainalysis axes another 15% of staff, citing difficult market conditionsThe Chainalysis workforce will be reduced by around 150 as the bear market bites deeper.1390 Total views4 Total sharesListen
Bitcoin clings to $67K, but analysis warns of 10% BTC price drop next
William Suberg14 hours agoBitcoin clings to $67K, but analysis warns of 10% BTC price drop nextBitcoin bulls are enjoying 10% month-to-date gains currently, but one trader warns that the picture should soon look very dif
Bitcoin Cash Represents 93% of November’s Crypto Spending in Australia
Bitcoin Cash Represents 93% of November"s Crypto Spending in Australia News.Bitcoin.com recently reported on web portal Bitcoinbch.com’s in-depth report, which detailed BCH
David Attlee12 hours agoVenezuela extends reorganization shutdown of crypto agency to March 2024The government will spend six additional months reorganizing the entity, which it shut in March 2023.1673 Total views4 Total
‘Arivaman’ to Travel the World in a Unique and Innovative Way
‘Arivaman’ to Travel the World in a Unique and Innovative Way press release PRESS RELEASE. As the new year gets underway, there has been a lot of speculation and interest regard
Bitget Launches Fund Custody Service With Dedicated Wallet to Elevate Safety
Bitget Launches Fund Custody Service With Dedicated Wallet to Elevate Safety press release PRESS RELEASE. Victoria, Seychelles 11 Jan 2023 –Leading crypto exchange Bitget lau
Dogecoin Will Start A Move To $4 If Current Demand Holds – Can Bulls Step In?
Este artículo también está disponible en español. Dogecoin is trading below key liquidity levels as the price struggles with intense selling pressure. The entire meme coi
William Suberg17 hours agoBitcoin price dives 2% on US jobs data as Fed rate hike bets heat upBitcoin briefly heads back down to $27,000 thanks to unexpected non-farm payroll numbers, with BTC price staging a strong reco