There is no denying that March has certainly started off with a bang – bringing with it a series of highly lucrative money making opportunities from re-accelerating inflation, a monetary policy dilemma for central banks to signs of an escalating “Global Financial Crisis 2.0”, tearing through the markets.
Exactly one year ago, the Federal Open Market Committee embarked on their most aggressive interest rate hiking campaign since the 1980s. The goal: to arrest a stubborn inflation wave that central bank officials spent the better part of a year dismissing as “transitory.”
Historically every time the Federal Reserve has engaged in an interest rate hiking cycle, they have kept going "until something eventually breaks”.
And that's the exact situation they find themselves in, once again on the one-year anniversary of their rate hiking campaign!
Two weeks ago, the collapse of Silicon Valley Bank and Signature Bank – marked the second-biggest banking failures in U.S history since the 2008 Global Financial Crisis – while simultaneously highlighting vulnerabilities in the banking system and displaying compelling evidence that financial institutions are struggling from the consequences of soaring interest rates.
A week on, and a third U.S bank – First Republic Bank has been propped up with a $30 billion bailout – preventing it from collapsing, for the time being anyway. The market turmoil also spread to Switzerland’s second-largest lender – Credit Suisse – wiping out over $60 billion in value from European banks across the continent, in a single day alone.
Over the weekend, UBS Bank agreed to buy Credit Suisse in a historic $3.3 Billion deal. But this still may not be enough to prevent risk of contagion spreading across the broader banking sector – and the global economy.
Depositors aren't waiting around to find out, which bank fails next.
On Friday, U.S customers withdrew a total of $42 billion from their accounts. That's $4.2 billion an hour, or more than $1 million per second for ten hours straight.
Meanwhile, the precious metal markets recorded a net inflow totalling $5.9 billion. That's the second largest inflow into safe-haven metals ever recorded in a single week since the 2008 Global Financial Crisis.
The 'crisis on top of crisis' that is currently unfolding boosted demand for safe-havens – sending Silver and Platinum prices surging to fresh multi-month highs – with both metals notching up impressive double-digit gains, literally in a matter of days.
The bullish momentum also split over into Gold with the precious metal topping $2,000 an ounce for first time in three years.
Interestingly, that’s the exact level Gold prices were trading at back in March 2020 – just before prices skyrocketed to new all-time record highs.
Since the final quarter of 2022, Gold prices have gone parabolic rallying over $400 an ounce from their November lows of $1,600.
And this could just be the beginning! That’s welcoming news for the Commodity bulls, but painful for anyone sitting on the sidelines, who must now decide how much FOMO they can handle.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
Trading has large potential rewards, but also large potential risk and may not be suitable for all investors. The value of your investments and income may go down as well as up. You should not speculate with capital that you cannot afford to lose. Ensure you fully understand the risks and seek independent advice if necessary.
Follow us on Telegram
Stay updated of all the news
EUR/USD closes in on 1.0700 amid broad USD strength
EUR/USD came under renewed bearish pressure in the American session and dropped to its lowest level since late March near 1.0700. Stronger-than-forecast PCE inflation data and hawkish comments from Fed's Mester provide a boost to the US Dollar and weigh on the pair.
GBP/USD loses bullish momentum after US data, falls below 1.2350
GBP/USD has reversed its direction and erased a large portion of its daily gains on Friday after the data from the US showed that the annual core PCE inflation edged higher to 4.7% in April. Although the pair clings to small daily gains below 1.2350, it remains on track to end the third straight week in negative territory.
Gold erases daily gains, holds above $1,940
Gold price turned south and declined to the $1,940 area in the American session on Friday. The benchmark 10-year US Treasury bond yield holds stead above 3.8% after stronger-than-expected core PCE inflation data from the US, not allowing XAU/USD to gain traction.
Ethereum price to outpace Bitcoin price as ETH jumps over key hurdle where BTC fumbles
ETH is working on its recovery after it dipped to a two-week low on Thursday. While Bitcoin price has failed to make a similar move and head back above $26,500, Ethereum is outpacing Bitcoin and has been able to push above $1,800.
Ford Stock: New agreement will give customers access to 12,000 Tesla chargers
Ford (F) stock has advanced about 2.5% early Friday following CEO Chris Farley’s announcement that Ford owners will be able to charge their EVs at Tesla Superchargers beginning in early 2024.